SEATTLE -- When Boeing and General Electric formed a partnership in 1996 to build airliners for the corporate jet market, the assumption was that their customers would be businesses.
Since then corporations have purchased Boeing Business Jets, or BBJs, but business buyers and charter operators only represents about 20 percent of the business according to Stephen Taylor, BBJ's president.
The business of business jets turned out to be much bigger and much different than anybody at Boeing expected.
"What we learned though, is that the market had a lot more potential in wealthy individuals and head of state," Taylor said.
About 40-percent of the BBJ buyers are wealthy individuals, and the other 40 heads of state, many from the middle east. Most BBJ's are sold outside the U.S. according to Boeing.
Initially BBJ's were only 737s, combining the shorter body from a 737-700 with the stronger wings and landing gear of a 737-800. Now the business has expanded to other Boeing jets, including the new 747-8 Intercontinental with 4,798 square feet of room.
So far about 150 737 based BBJ's are built and flying and nine 747-8 Intercontinentals all with custom interiors, one yet to be delivered. To put that into some perspective, 150 737s represents nearly four months of work in Renton at even the current production rate of 38 airplanes per month.
Boeing engineers and builds the jets themselves, and then the planes go to some 17 custom finishers under license to Boeing who complete the interiors and paint jobs. Taylor says the cost of the interior can be as much as the air frame itself.
How much do they cost? Boeing says about $85 million for a completed 737 BBJ, and around a half billion dollars or more for a 747-8 Intercontinental. But Taylor notes thecost for 747s also typically includes missile defense systems and secure data.
The demand keeps building. A dozen 787 Dreamliners are on order as BBJ's. 777s and 767s as well.
Taylor notes that big jets have been converted into so called VIP configurations for a long time, but those were typically planes converted from used airliners into custom jets. These jets can all be purchased new.
Airbus has also moved into the corporate jet market.