Legacy Jet for the next president?

TAKIN' CARE OF BUSINESS



By Babe Romualdez

September 1, 2009

The P1.2-billion budget they were planning for GMA’s executive jet no doubt had bad timing because it came on the heels of criticisms regarding the president’s trips abroad and the lavish dinners in New York and Washington. At this time, it would be more practical and cost effective for the president to lease because she will not have to worry about the problems that have to go with maintaining an executive aircraft.

But perhaps when all the furor has subsided and when the effects of the global recession are starting to subside, people will not be so resistant to the idea of a private jet for the country’s new president – whoever he or she may be. For one, there’s the question of safety. No one will argue that the current fleet at the president’s disposal is composed of half-a-century old planes that are in dire need of some serious refurbishing – problems that afflict even the Philippine Air Force as a whole with their outdated fleet of choppers, fighter jets and other equipment.

An aircraft worth considering would be the Legacy Executive jet from Brazilian aerospace conglomerate Embraer, one of the world’s largest aircraft manufacturers. From the time the company was privatized in 1994, it has become one of the best known companies and a top exporter in Brazil. ATR Kim Eng Financial Corp. chairman Ramon Arnaiz has been quietly working through his Rako Trading Corp. to successfully acquire the exclusive distributorship of the Legacy Executive jet series in the Philippines. The new super midsize aircraft (with a $27-million tag price) on display at the Domestic Airport would be appropriate for the travel needs of the next president of this country.

Derived from the commercial jetliners ERJ-135 and ERJ-145, the Legacy Executive is configured with up to 15 seats, with a full glass cockpit that includes a Honeywell Primus 1000 digital avionics suite and color weather radar with turbulence detection. It also has a Global Positioning System and satellite communications capability. The interior cabin is built with fine-quality hardwood finishes. The cabin can be configured into a 12-seater with sideboard, tables and a three-seat sofa, and it would be perfect for any president who is not over six feet in height.

In 2004, Embraer delivered its first Legacy Executive jet in Macao through the Legend Development Company of David Chow, and Ramon is hoping the Philippines wills see its first Legacy aircraft in the next couple of years. Although the market for midsize jets may still be relatively small, they will try to market it aggressively and simulate the success of Embraer over the years. Although the flagship line is the popular Legacy 600 which began flying in 2002, Embraer has announced two new models, the Legacy 500 and the Legacy 450, which will enter service in 2010 and 2013, respectively. In November last year, the Brazilian conglomerate (with headquarters in Sao Paolo whose facilities boast of a 5,000-m runway that is said to be the third longest in the world) received a total value order of over $208 million for its Legacy series, including from Middle East customers.

While the Brazilian conglomerate’s closest competitor is Canadian manufacturer Bombardier, it has been cutting into the US market and is giving Boeing and Lear jets a run for their money. As a matter of fact, the company has maintenance and commercial offices in Fort Lauderdale in the US and in Paris, Singapore and Beijing. The market in the US however may be a little difficult at this time considering the global financial crisis, with American businessmen selling off their private aircraft. About two weeks ago, the US Congress also announced it was scrapping plans to buy four new executive passenger jets worth $550 million for the Air Force. It’s also dropping plans to refurbish jets for the use of government officials.

It can be recalled that some Congressmen almost went ballistic when automobile executives asking for government bailout money flew into Washington with their executive jets – prompting one irate lawmaker to comment that it was ironic for auto executives to fly to Washington with a begging bowl in hand. Early this year, Citigroup had to drop plans for the purchase of a $50 million Dassault Falcon jet it ordered in 2005 even though it would have to pay huge penalties due to severe criticism from legislators and ordinary Americans, with Barack Obama also commenting that buying jets was not the best use of money by companies receiving government bailout funds.

Embraer though continues to be optimistic with the future of the company, breaking ground for its first US assembly plant in December last year. According to former Embraer president and CEO Mauricio Botelho (who is credited for turning the flagging, state-owned company into the 4^th largest aircraft manufacturer in the world), their strategy has been to take on the competition by “offering products with the latest technology and more competitive operating costs,” anticipating better profit margins in the area of executive aviation than in commercial aviation. There are now over 130 Legacy aircraft operating in more than 23 countries, including China and India – and hopefully soon, the Philippines.