October 14, 2014 / 9:04 PM / 4 years ago

UPDATE 2-Gulfstream launches two new jets, signs deals with Flexjet, Qatar Airways

(Adds analysis and details about price and buyers; closing stock price)

By Ankit Ajmera

Oct 14 (Reuters) - Gulfstream Aerospace Corp, a unit of General Dynamics Corp, launched two new business jets on Tuesday, the G500 and G600, with orders of up to 70 aircraft from Flexjet LLC and Qatar Airways.

The new planes, available in 2018 and 2019, respectively, feather into Gulfstream’s product line at the large end of the business-jet market, fitting between its G450 and G650 models and adding competition for Bombardier Inc and Dassault Aviation.

The announcement did not include orders for the G600 jet, and Gulfstream left unclear how many of the 70 jets are firm orders as opposed to options.

The new jets are likely to draw customers wanting the “panache” of the latest plane but in a jet tailored to the most popular routes, said Jeff Trance, a senior vice president at charter company Air Partner PLC.

“These aircraft are made to link specific cities” more efficiently, and “still give passengers the same amenities” of current Gulfstream jets, he said.

Dallas-based Flexjet, a fractional jet ownership and leasing company, will order up to 50 aircraft, including the 16-seat G450, the new G500 and the flagship G650, Gulfstream said.

Qatar Airways, the state-owned flag carrier of Qatar, will order up to 20, including the G500 and the G650ER for its Qatar Executive charter service.

The G600 has a list price of $54.5 million and is able to fly from London to Singapore at Mach 0.85, Gulfstream said, and the $43.5 million G500 can fly from London to Bangalore at the same speed. The prices are about $10 million less than the G550 and G650 models.

Both new jets will have shorter ranges than Gulfstream’s longest range G650ER. The G500 cabin will be seven inches wider than the G550, and seven inches narrower than the G650. Both will seat up to 19 passengers.

The jets will be made at Gulfstream’s plants in Savannah, Georgia. Pratt and Whitney, a unit of United Technologies Corp , will supply the PW800 engines.

Gulfstream will produce the wings and vertical and horizontal stabilizers. Replacing major suppliers for the parts will reduce risk, RBC Capital Markets analysts Robert Stallard wrote in a note.

Spirit Aerosystems Holdings Inc is the wing supplier for Gulfstream’s G650 and G280 jets, while Triumph Group Inc supplies wings for the company’s G450 and G550 jets.

Spirit recorded a loss of nearly $531 million from the Gulfstream program last year, and has been trying to sell the Tulsa, Oklahoma, plant at which it makes Gulfstream jet wings.

Spirit and Gulfstream are in a dispute over unpaid dues, with an arbitration set to be heard next January.

Qatar Airways plans to use the jets to expand its Qatar Executive private jet service for families and businesses, a spokesman said.

Qatar Executive’s current fleet consists of Bombardier Inc’s Global Express, Global 5000 and Challenger 605 aircraft, which carry between 11 and 13 passengers and have a range of up to 6,150 nautical miles (11,390 km).

Flexjet will build out its current fleet of 150 jets. It already has 245 aircraft on order from Bombardier and 70 from Embraer. The Gulfstream G500 “expands the long-range large-aircraft spectrum of our fleet,” Flexjet said.

General Dynamics’ shares ended up about 0.8 percent at $119.19 on the New York Stock Exchange. (Additional reporting by Rohit T.K. in Bangalore and Alwyn Scott in New York; Editing by Simon Jennings)

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