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Biz Jets: Technology and Market Structure in the Corporate Jet Aircraft Industry traces the development of business jet aircraft from the mid-1950s through early 1993. It begins with a discussion of the technological and market opportunities existing in the period prior to the introduction of the Lockheed JetStar and the North American Sabreliner. The subsequent appearances of other biz jets -- the Learjets, HS-125s, Jet Commanders, Falcons, Gulfstreams, Citations, Challengers, Mitsubishis and derivative aircraft are treated in considerable detail. Biz Jets also covers 'planes involved in many unsuccessful attempts to enter the industry from 1955 through 1993.
The study shows that while the industry has been quite concentrated throughout its history, the positions of the leading firms have always been contestable. Indeed, leaders at one point in time have often been displaced by others who succeeded in marshalling technological and market opportunities to their advantage. Manufacturers have had to undertake continuous efforts to improve the price-performance characteristics of their aircraft to gain and hold their market shares.
Rivalries in the effective use of the stream of new technologies have brought forth new aircraft with both better performance and lower operating costs. At the same time, however, participation in the market has been extremely risky. Only a few companies have been able to earn profits. Entries, exits and mergers have altered the structure of the industry, but it remained decidedly unstable at least through 1992.

Inhaltsverzeichnis

Frontmatter

Chapter One. Technology and Market Structure

In 1950, the Pittsburgh Plate Glass Company (now PPG Industries) purchased a used C-47, the military version of the DC-3. The plane was converted to business use, with accommodations for 12 passengers and a crew of two. A caricature of a grasshopper was painted on the nose of the plane with the name, “The Glasshopper” inscribed below it. A former military pilot was hired, and PPG had an “executive aircraft” available for its use.1
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Chapter Two. The 1950s: Pressures Build for the Introduction of Business Jets

In 1953, a data service defined business aircraft as planes owned by “a corporation or [other] business organization . . . , powered by at least two engines, equipped to fly day, night and [on] instruments to transport business personnel, prospects, customers, suppliers and friends in connection with the execution of business duties.”1 Using that definition, a survey showed that, as of June 30, 1953, “a total of 954 twin-engined business aircraft [were] owned by 674 U.S. firms; 517 of these firms own[ed] and operate[d] one aircraft, while 157 others operate[d] fleets.” Of these planes, 46% were Beechcraft Model 18s, 20% were DC-3s, 19% were Lockheed Models 12, 14, or 18S and the remainder were assorted other types. At first glance, it appears that PPG had alternatives to buying the The Glasshopper, a C-47 converted to a DC-3.
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Chapter Three. 1960–1970: The Developing Market for Business Jet Aircraft

JetStar Lockheed "gambled on the future and in November 1958 committed the [CL-329 JetStar] to quantity manufacture."1 Sales to corporate customers had been an objective from the outset and Lockheed did not reverse its decision when the Air Force opted to buy the smaller T-39 Sabreliner for its trainer and light transport purposes. While the prototypes were developed in Burbank, California, it was decided that production models of the JetStars were to be produced at Lockheed's Marietta, Georgia, plant. Efforts to sell the craft to corporate customers began as the plane was being developed.
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Chapter Four. Cessna Opens the Lower End of the Market

Cessna's decision to enter the market in 1971 with a small, modestly-performing, low-priced business jet was a very risky one. As we have seen, a number of other companies had tried to market a low-priced business jet, and none had come close to success. The MS-760 Paris was available in the U.S. prior to any other business jet, yet it (and subsequent versions of it) found few customers.
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Chapter Five. The “Heavy Iron” Business Jets: Gulfstream, Dassault and Canadair

Grumman Aircraft Corporation was established in 1929. The company has a distinguished record in the development and sale of sophisticated military aircraft. Grumman’s first planes were the carrier-based, single-seat FF-1, F2F and F3F biplanes. The F4F Wildcat was developed and produced under a 1931 contract with the U.S. Navy. The Wildcat was followed by, among others, the F6F Hellcat (1942), the F7F Tigercat (1945), the F8F Bearcat (1945), the F9F Panther jet (1948), the F9F Cougar jet (1954) and the extremely well-known F-14 Tomcat (1972). Grumman was also responsible for the TB Avenger (1942), the AF Guardian (1950), the S-2 Tracker (1953), the OV-1 Mohawk (1959), the E-1B Tracer (1960), the A-6 Intruder (1963), the C-2A Greyhound (1966) and the EA-6B Prowler (1971). Above all else, Grumman was recognized as the producer of state-of-the-art naval aircraft.1
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Chapter Six. The Market for Mid-Sized Business Jets After 1970

JetStar The Lockheed Aircraft Corporation faced “crisis years” after 1965.1 Although Lockheed had won the 1965 C-5 competition, it experienced massive costs overruns on the total package (fixed price) contract. The AH-56A Cheyenne program ran into similar cost overruns and was threatened with termination in 1969. In the same year, procurement of the C-5 was cut back from 115 to 81 aircraft. The company had similar problems with its missile programs. In response to a 1956 FAA request, Lockheed invested heavily in an SST design. The FAA selected the Boeing version in December 1966 despite Lockheed’s claim that the airlines preferred its concept. Lockheed then decided to use its C-5A design to re-enter the commercial transport market, a project that evolved into the widebody L-1011 TriStar. The L-1011 was ordered in quantity by several airlines, but always faced intense competition with the McDonnell Douglas DC-10.
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Chapter Seven. Schumpeterian Rivalry and the Market for Business Jets

We have been looking in some detail at the development of the market for business jet aircraft. Throughout, the emphasis has been on the nature of the rivalry among the suppliers of those aircraft " on "competition from the new [airplane], the new technology, the new [entrant], the new type of organization."1 Virtually no attention has been given to the standard "structure-conduct-performance" paradigm of industrial organization economics. In market circumstances such as those portrayed in the past chapters, we find little sense in exploring how market structure may have influenced the conduct and performance of the firms in the industry. Where progressing sciences offer continuing opportunities for changes in valuable product characteristics, the predominant influences run in the opposite direction. The conduct of firms " conduct with respect to R&D, product and process innovations and marketing " largely determines their relative achievements. The structure of the market and changes in that structure reflect hardly more than the consequences of the varying patterns of achievements as first one and then another in a series of new products are offered.2
Almarin Phillips, A. Paul Phillips, Thomas R. Phillips

Backmatter

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