Leg Room.

• Author: Easterbrook, Gregg
• Position: Boeing Business Jet for executives - Brief Article

Boeing's new toy for the executive who has everything

SO YOU'RE EARNING 420 TIMES AS much as the typical hourly worker, you've got the vacation homes and tasteless modern-art collections, you've dumped the woman who bore your children in favor of the trophy babe. What's left out there to grasp? For the Fortune 500 CEOs and others of the newly rich, the latest answer is--an entire Boeing airliner converted to your personal use.

Rather quietly in what is usually a publicity-oriented industry, the king of aerospace firms has begun selling the Boeing Business Jet (BBJ), a 737-700 jetliner, which normally seats about 125 passengers, modified into a corporate aircraft for the use of a few executives or even just one person. Boeing delivered the first fully completed (that is, including customized interior) BBJ in September 1999, to a buyer whose identity Boeing will not disclose. The company has 33 BBJs at various stages in the manufacturing process, and says it holds orders for 56 more. The aircraft costs from $43 million to $48 million, depending on the level of interior trim--mahogany and marble push up the final price tag--plus at least $5.1 million for annual fixed costs and at least $1,400 per hour to operate. Concerned about market share, Airbus recently announced a competitor, the Airbus Corporate Jetliner (ACJ). This is an entire Airbus 319, also normally seating about 125, converted for a few VIPs. With the economy flush, aviation analysts consider the ultra-premium executive birds a significant growth arena for aircraft manufacturers, representing a sales market of several billion dollars annually. Boeing has already begun taking advance orders for the BBJ-2, an even bigger, more expensive executive airliner, based on the larger 737-800, which is now under development.

Who's lining up to buy these airborne ego platforms? General Electric and the golfer Greg Norman are the only publicly announced U.S. customers for the BBJ. Most buyers are assumed to be Fortune 500 companies, but "have chosen to remain anonymous, which is often typical of private business jet transactions," Boeing says. Headed into that next labor negotiation, the CEO might not want it known that he's just spent $48 million in company funds on a personal toy.

Once first-class seating aboard commercial flights was seen as sufficient for the wealthy or for senior corporate management. Then the minimum became small private jets like the Gulfstream, which themselves cost...