Flexjet gets first Embraer Legacy jet anchoring mid-size program
SAO PAULO (Reuters) - Flexjet, which offers fractional ownership and leasing of private jets, is counting on Embraer's (EMBR3.SA: Quote) new Legacy 450 and 500 for the bulk of a mid-size business jet program that could grow beyond a quarter of its fleet, Chief Executive Mike Silvestro said on Tuesday.
Flexjet received its first Legacy 500 this week and expects four more by the end of the year, Silvestro said in a telephone interview. Deliveries of the Legacy 450 start in June 2016.
Both Brazil-based Embraer and Flexjet, the second-largest company selling shares of private aircraft after Warren Buffett's Netjets, declined to reveal the size of the Legacy order.
Flexjet turned to the Legacy 450/500 to anchor its mid-size fleet after Bombardier Inc (BBDb.TO: Quote) suspended development of its Learjet 85 in January. Flexjet had placed 60 firm orders for that aircraft.
Silvestro said the Learjet order "remains intact" until Bombardier gives further guidance, but Flexjet customers are free to migrate their deposits to other aircraft.
Flexjet already flies smaller business jets, including "dozens" of Embraer's Phenom 300s, and recently added long-range Gulfstream aircraft from General Dynamics Corp (GD.N: Quote).
Silvestro said the Legacy 450/500 will now anchor Flexjet's move into the mid-size segment, which could eventually make up "at least 25 percent" of the company's fleet, as it does for the rest of the industry.
Flexjet's fleet is expected to reach 150 business jets by the end of the year. The company has placed 207 firm orders with Bombardier, Gulfstream and Embraer since private investment firm Directional Aviation Capital acquired a majority stake in 2013.
Including options, the investment from Directional Aviation could top $8 billion and expand Flexjet's fleet to 445 aircraft. Continued...