GE Joins Boeing In Launching Business Jet Venture.

<FONT SIZE="+3"><B> GE Joins Boeing In Launching Business Jet Venture</B>

By Jay Campbell

Seattle - Spurred by corporate fleet managers' and executives' interest in larger business aircraft, Boeing and GE last month announced a joint venture to manufacture a version of the 737-700 as a business jet.

At a price of about $35 million, the new jet will be capable of traveling on routes such as New York to Tokyo or London to Johannesburg. It will offer a flexible interior that can be configured as a meeting center, communications post or traveling hotel.

"Each customer will determine its own needs," said Boeing's Chuck Colburn, regional director of product marketing. "But most significant is the fact that this jet has a lot of space. It will enable CEOs to bring a team with them, rather than paying for business travel or using two jets. They can even have their own separate office. In short, it offers opportunities for more cost-effective air travel and will change what corporate people do when traveling."

GE is a minority participant in the venture, called Boeing Business Jets, and will be its launch customer with an order for two jets to be delivered by the end of 1988. Boeing expects to build at least 10 of the jets per year; GE will make the engines.

Since the announcement, four major corporations have contacted the manufacturers with an interest in buying, Colburn said. "We're looking at Fortune 500 companies, and that's the primary market, but we think there's a potential market beyond that, such as foreign companies, wealthy individuals and heads of state," he said.

Asked whether he expected charter and leasing companies to purchase the new jet, Colburn said, "it's inevitable."

Boeing has made clear that it does not expect use of its new jet to reduce business travel on the commercial airlines-Boeing's best cust8888omers. Boeing president Phil Condit said the new airliner will be "complementary" to its cousins flown by most major airlines worldwide. And a company spokesperson said, "it's not fair to compare this to commercial aviation."

Jack Olcott, president of the Washington, D.C.-based National Business Aircraft Association, said the new jet could actually stimulate business travel on the airlines.

"As companies head into the developing areas of the world such as China or Russia, their leaders may use a business jet because of its scheduling flexibility and convenience," he said. "But after those people make the initial decision to move into such markets, a number of individuals traveling routinely would be using the airlines. Corporations are looking to be more efficient in air travel. Business aircraft use is one option, and there are times when it's appropriate and times when commercial air travel is appropriate."

Boeing's entry into the market intensifies competition for long-range business aircraft, previously provided only by fierce competitors Bombardier and Gulfstream. Bombardier's Global Express, due to arrive next year, and the Gulfstream V, to be finished this year, offer many of the same capabilities-and even a longer range-as the 737-700, but in a smaller package.

But Olcott said that the three planes did not overlap with each other. "I think there's room for all of them because the role of the business aircraft is growing," he said.

A recent CIT Group study indicated that the corporate aircraft market will show "modest growth through 1999," with dollar sales of new and used aircraft growing at 5.3 percent a year.