Textron Hemisphere Delayed (Netjets Order)
 

Delayed again! This isn’t too much of a surprise considering the Safran Silvercrest engine development issues, but it is disappointing:

https://www.ainonline.com/aviation-n...emisphere-hold

Why is this relevant? Because Netjets conditionally ordered up to 150 Hemispheres (orders and options) in the last year despite the engine issues:

https://www.google.com/amp/s/www.ain...ispheres%3famp

That's too bad because the Hemisphere looks good ON PAPER. Would love to see it eventually in the Netjets lineup - but, at this pace, who knows if that will ever happen.

Love how the NJ folks were getting all excited about the “large” recent order [emoji2357]. The vast majority of Longitudes will replace the X and the Falcon, and the Global 7500 will replace the G-V/G550. In essence little to none NET new airplanes. Hemisphere for the time being is dead. A lot of propaganda, very little essence, very much in line with the NJ way.

Perhaps, but I don’t think NJ had anything to do with this latest Hemisphere program delay. The French idiots at Safran can’t get their act together and fulfill their Silvercrest promises. I would bet Netjets wants the Hemisphere to move forward considering the age of the airplanes it would likely replace in the fleet. New airplanes generate excitement and more sales. Right?

New airplanes generate cash flow. This will hurt the bottom line of NJA.

NJA makes money on sales of new airplanes, operationally (hasn’t always been the case but they make a bit on it now) and on retirement of contracts. But the most money is made on sales. They place a large order for 150 airplanes and get a discount to let’s say 25M a unit. The MSRP is 35M. They pocket the difference when they sell off the shares that equal a full airplane. No new airplanes, no additional cash flow.

Truly is an a neat way to make money, sell new units and pocket cash. Operate the units for the customers and generate a little cash. Buy back at end of 5 years below market rates and then sell on open market for more than they bought them for and make cash.

Of course due to IRS laws and WB lobbying effort the 5 years contract can be depreciated fully and NJA is a giant IRS tax shelter for the rich....we support our jobs by paying taxes so the rich don’t have to travel on ‘Merican with all the slobs...

Textron Hemisphere Delayed (Netjets Order)
 

NJ knew full well the Hemi would not see the light anytime soon. As advertised it is a very good product, entry large cabin, no doubt. But if you can’t buy it, it is worthless. They inflated their order by MANY planes. And BTW, with 100+ Lats, they are going to have the SAME issue going on now with the XL.

So did the Hawker Horizon/4000. Hopefully the Hemisphere won't suffer the same fate.

Global 7500 is more of a G650 entrant. New market for NetJets.

Also, I wouldn’t be surprised if there wasn’t a Plan B being considered for the Hemisphere if/when it didn’t work out.

There is no plan B other than the increased probability of operating slightly more than the 25 firm orders for Challenger 650s. The Hemispere delivering the promised performance for the promised price to buy and operate would be a major money machine for NetJets. No other manufacturer has a product currently or in the pipeline that is similar in cost and performance. Cessna isn't killing the program outright. If an engine comes along that can meet the price/ performance figures, it will be back in development and NetJets will buy a lot of them.

As far as replacing the G450/550, that isn't really happening. We are getting new Global 6000s slowly- one or two a year now and hanging on to the Gulfstreams, hoping that better preventative maintenance will improve their reliability and stretch their life span. I believe NJI had around 70 big Gs at one point and now there are only around 45 combined Globals and 450/550s. The competition is kicking our behind by offering Gulfstreams to those who only want a Gulfstream and at a drastically cheaper price (FlexJet) and offering Globals for drastically cheaper (VistaJet). It also doesn't help when large cabin customers get hosed repeatedly when they break at the most unfortunate times. Scheduling beats the crap out of the Globals and Gulfstreams by upgrading customers left and right, putting lots of short flight cycles on the airframes and reducing the reliability. This short sighted "efficiency" isn't taking into account the millions lost when an angry customer leaves the program because they were delayed or cancelled due to maintenance. I guess the plan to stem the loss must still be a recession hurting the competition so much that they get out of large cabin operations. Instead of just waiting for a storm- buy some G600s to cater to customer desire and drastically reduce the airplane upgrades/ airframe cycles to keep mx reliability higher. They were really hoping the Hemispere would come soon to take over at least part of the 450 market and that the Global 6000 and 7500 would be able to truly replace the 550. To quite a few customers, only a Gulfstream will replace a 450 or 550 and until management accepts reality, there will be more large cabin losses.

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Well said jtf560....

NetJets burned their bridge with Gulfstream back in 2009, then ran over it again in 2012 and finally nuked it in 2015/16.

Sure, money talks... but that relationship was utterly destroyed when Richard left the company. NetJets owned 99.99% of the global large cabin fractional business in 2005. They squandered and lost it, and will never see it come back. Too many competitors are firmly entrenched in the market now.

You snooze, you loose.


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Great post. Nothing ramps up sales like new airplanes. It’s frustrating that Safran/Textron couldn’t figure out some contingency plans if the Silvercrest failed to meet the high expectations. I agree that the Hemisphere program is not cancelled - just tabled for now. With such a big order from Netjets, Safran has a big incentive to get things right ASAP.