Corporate Jet Set

The executive jet, one of the brightest gleams in the eye of the aircraft industry, is having a bit of trouble. Of the 25,000 corporate-owned planes now flying, only about 350 are jets. And with the past year's tight money, lower profits and suspension of the investment tax credit, many a businessman concluded that a private jet was an extra that his company could do without.

Naturally, this is causing some pain for planemakers. Lockheed, whose ten-passenger JetStar was the first of the corporate jets, sold 20 of the $1,500,000 planes last year, is doing no better so far in 1967. More troubled is Wichita's Lear Jet, which found itself stuck with $9,000,000 worth of unsold planes, had to merge last spring with Gates Rubber to get needed working capital. The slowdown is not confined to American makers. Britain's Hawker Siddeley, which delivered 65 of its jets to U.S. corporations between 1964 and 1966, sold only seven more during this year's first five months.

Bigger Toilet. In so new and competitive a market, the downturn is enough to try even the most persistent salesman. Rockwell-Standard Corp. President Willard F. ("Al") Rockwell Jr., whose well-diversified company (other lines: automotive parts and construction equipment) turns out the $600,000 Jet Commander, complains that too many companies are fighting over too few customers. Underscoring the keenness of the competition, Rockwell tells of one prospective customer, who opted for a rival jet simply "because it has a bigger toilet." Rockwell-Standard, meanwhile, plans to merge with another jetmaker, North American Aviation, though the two companies announced last week that the deal will be delayed because of an antitrust objection raised by the Justice Department. North American's Sabreliner, while one of the most successful of the corporate jets, suffered a sharp decline following last October's investment tax credit suspension.

With the credit restored (and retroactive to March 10), hopes are high for a surge in sales. Pan American, U.S. distributor of France's Dassault-built Falcon, has shown its faith by signing up for 200 Falcons to date--and, says Business Jets Division Consultant David A. Anderton, "that's how many we intend to sell." Equally confident is Grumman, whose new Gulfstream II has logged 75 orders even before its first scheduled delivery, later this summer.

One obstacle is the impression that corporate jets are luxuries, a notion more popular with stockholders and unions than with executives. Freely predicting that 4,000 corporate jets will be flying by 1975, the industry figures that one company's purchase of a jet will give its executives so much speed and mobility that rivals will be compelled to follow suit. "It's not just keeping up with the Joneses," says William F. Remmert, whose St. Louis-based Remmert-Werner, Inc., markets North American's Sabreliners. "It's keeping up with the competition in a business sense."

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