"The sort of people who can afford their own Boeing Business Jet have a completely different set of expectations about how a company will treat them, the sort of services that they will receive, basically everything from what the product looks like to how it is supported. Our role in BBJ is to take care of those unique customers and their unique requirements."
ELEPHANT LIFESTYLE (L): What are your impressions when you hear the words oil and gas?
STEVE TAYLOR: When I think oil and gas, I think of my customers, as many of them are in that business. I’m reminded of an airplane delivery to Ashgabat, Turkmenistan, that I made 20 years ago. At the time, they were just coming out from under Soviet rule and had no wealth at all. They were still using the ruble, which was devaluing incredibly quickly, but they had phenomenal wealth from gas reserves and they were just discovering their ability to sell it to the West.
The only place to stay was in an Intourist hotel. The first morning, I changed $100 and then all eight of us went to breakfast. When it came time to pay, the server showed us an abacus, which I couldn’t read, and nobody else had any money, so I pulled out these rubles. She said, “No, no, no,” and I thought I didn’t have enough. Eventually, she took out the smallest bill, disappeared and came back with a stack of change. I learned that our eight-person breakfast was 37 cents and I was holding literally a year’s salary. Since then, Ashgabat has changed as much as any city on earth and Turkmenistan’s airline and head of state have proven to be great Boeing customers. It is a remarkable example of what gas was able to do for an economy.
L: What is your personal source of energy?
ST: Airplanes are my thing. I work with airplanes all week long and then on the weekend I go and play with them. I just love airplanes. For me, to get paid to play with them is amazing.
L: So that is how you came to this position with Boeing Business Jets (BBJ)?
ST: I joke with everyone that I can’t hold a steady job, because my resume is so crazy. I started as a young engineer at Boeing working for my good friend Chuck Colburn who now works for me as our director of marketing. When BBJ was formed 16 years ago, Chuck was the first employee with the responsibility to grow this product line within the Boeing Company. I had his old job as an engineering manager and joined BBJ as its fifth or sixth employee as a salesman. My passion is airplanes and I had been flying my whole life, so I got an opportunity outside of the company when one of our customers hired me to fly his BBJ. I piloted BBJs for customers and then Boeing offered me a job flying. I came back and have had assignments inside Boeing in Executive Flight Operations and in Flight Test. I later went back into BBJ as chief pilot and now as president.
L: What is your vision?
ST: BBJ is like a small boutique within this large company that is Boeing. As a boutique within this bigger company, we strive daily to address the very specific needs of our clients, because they have a very different set of requirements from an airline. The sort of people who can afford their own Boeing Business Jet have a completely different set of expectations about how a company will treat them, the sort of services that they will receive, basically everything from what the product looks like to how it is supported. Our role in BBJ is to take care of those unique customers and their unique requirements.
L: How many jets do you have on order?
ST: We have a backlog of BBJ’s through 2014 and we typically deliver six in a year. We also have a backlog of 747’s and 787’s that stretch out over the next seven years.
L: What impact does EBACE have on your company?
ST: That has evolved over the years. This is our 12th year at EBACE, and when it first started we saw a lot of buyers at the show, so it was a very active opportunity for us to sell airplanes. Today, we see fewer principals coming to see the product – I think that’s largely because they have had a chance to see our products elsewhere and maybe their expectations have migrated; now they want us to come to them instead of coming to a show. We do still see a few, but not to the degree that we did in the past. Those who do come are airplane people who want see what is new. Having said that, this is still a very important show for us, because all of our customers have somebody who manages their airplanes for them, and those folks often come. It’s very important for us to keep the dialogue open with the customers and maintain that contact with them on a regular basis.
L: What are some new concepts on the drawing board for BBJ?
ST: Probably the biggest thing is that the commercial airline side of the business is developing a new product called a 737 MAX, a re-engined version of the 737 NG that we sell today, so we are pursuing opportunities to make a VIP version of that. To put it into context, they are doing it on the commercial side of the company in order to make it more efficient, which is critically important for the airlines. But for our customers, more efficient means that they can go much further with a given quantity of fuel, so the more efficient the airplane, the longer the range. What is valuable to our customer is not so much that they will save 10 percent on the fuel bill, but rather that the new airplane will fly about 500 miles further.
L: What does the five-year future hold for BBJ?
ST: That’s the approximate timeline when the 737 MAX airplane will be coming along, so how we position ourselves for success when that airplane comes online is probably what the five-year horizon is most dependent on. By the end of 2012, we will have delivered eight 747-8s for VIP clients. You may need a word bigger than elephant for those customers. Right now, today's focus is helping them complete those airplanes and get them into service. Following that we will start delivering the new 787 and we are now working on how to put the interiors into those airplanes. With this and the new 737 MAX in five years time, that will be the backbone of our business.
L: What is the build time for a 787 as a VIP?
ST: Once we deliver the empty or “green” airplane, the interior outfitting alone will take about 18 months. On top of that you need something like a year or 18 months of preparation, so that you are ready to do the interior as soon as the airplane delivers. So to do it right, it is probably about a three-year project, with a contingency, following green delivery. And that product has been so successful in the market that the backlog is presently out at about seven years; so you have to get in line now or you will not see your airplane until the end of the decade.
L: What is your message about BBJ? What would you want people to know that they may not?
ST: I would say that we have the most capable line of very high-end VIP aircraft in the world, from the traditional 737-based BBJ, which has the lowest cabin altitude of any of the large airplanes, on through to the 747, which is the fastest large commercial jet in the world, to the 787, which is the most efficient and technically advanced jet with the lowest cabin altitude. We have a full line of the most capable airplanes in the highest end of the VIP market.