U.S. Government Leases Five General Dynamics Gulfstream C-37A Aircraft in $477 Million Lease and Maintenance Agreement
Contract Will Save Government $400 Million Over 10-Year Program Term
WASHINGTON, D.C. -- Gulfstream Aerospace Corporation, a wholly owned subsidiary of General Dynamics (NYSE: GD), will provide five Gulfstream C-37A aircraft to the U.S. Air Force in a $477 million lease and support service agreement. This multi-year aircraft lease pilot program will supply additional aircraft for the Department of Defense regional Commander-in-Chief (CINC) mission and maintenance support services for up to 10 years.
The first two special mission C-37A’s – the U.S. military designation for the Gulfstream V, the world’s first ultra-long range business jet – will be delivered to the Air Force in July and August 2001. The remaining three aircraft will be delivered by September 2003.
"This innovative and cost-effective acquisition of additional C-37A’s will significantly reduce operating and support costs for the CINC support mission," said Bill Boisture, Gulfstream’s president and chief operating officer. "The C-37A’s will replace large transports, which due to their age, high cost of operations and operational restrictions, are no longer suitable for the mission."
The U.S. armed forces have six fully outfitted C-37A aircraft in service today. The aircraft are being used to provide fast, safe and reliable worldwide transportation for Cabinet members, members of Congress, senior government officials and military leaders. One of these aircraft, delivered in February 2000, is the first to support the CINC mission.
"C-37A’s currently in government service are demonstrating their expected cost savings and performance," said Monroe "Buddy" Sams, Gulfstream’s senior vice president, government sales and marketing. "They meet stringent noise and emissions requirements worldwide and have the latest avionics and safety features."
The new contract will quickly place additional C-37A’s into the government fleet to replace aging, airline-type CINC aircraft that average more than 40 years of age. These aircraft, which are experiencing poor reliability and operational availability, were not considered good candidates for modernization. The cost avoidance and savings to the Air Force over the 10-year lease term is expected to be approximately $400 million.
"The new C-37A’s are a more suitable choice for the CINC support mission," Sams said. "They provide world-class mission performance and state-of-the-art communications to allow the CINCs to maintain constant command and control."
In order to meet the government’s lease requirements, Gulfstream partnered with Potomac Federal, the federal leasing unit of GE Capital’s Vendor Financial Services.
"Rather than purchase these aircraft, the partnership with Potomac Federal allows the U.S. Air Force to lease aircraft on a long-term basis," said Eric Hinson, Gulfstream’s senior vice president of financial services. "The significant reduction in up-front capital costs will generate considerable savings for the government."
Since achieving final certification in April 1997, the revolutionary Gulfstream V has met or exceeded all technical and performance criteria. The Gulfstream V garnered aviation’s most prestigious award -- the Robert J. Collier Trophy -- in its first year of service. The Gulfstream V can operate from a wide variety of airfields and offers low maintenance and life cycle costs. The Gulfstream V’s advanced aerodynamic design and new BMW Rolls-Royce BR-710 engines combine to give it a range of 6,500 nautical miles.
For military surveillance applications, the range and altitude capability of the Gulfstream V provides extended mission time-on-station at altitudes higher than most aircraft. Gulfstream has produced the most capable and cost-effective business-jet-based special mission aircraft for over 35 years. They are in use by more than 30 world governments and military services.
Earlier this month, Gulfstream announced the launch of the next-generation Gulfstream, the GV-SP. The GV-SP will offer greater range, the largest cabin area in this class, additional baggage volume, a greater weight allowance and the most advanced avionics suite in the industry.
In addition to the GV, the Gulfstream IV-SP is also widely used for special mission applications. Approximately 56 Gulfstream IVs and IV-SPs are in service with governments worldwide. Most recently, the Japanese Defense Agency ordered its fourth Gulfstream IV-MPA (Multi-Purpose Aircraft), a version of the Gulfstream IV-SP containing a five-by-six-foot cargo door. The U.S. government also operates an extensive fleet of C-20 aircraft, based on the Gulfstream III and Gulfstream IV, in a variety of VIP and special mission roles.
Gulfstream designs, develops, manufactures and markets the world’s most technologically advanced intercontinental business jet aircraft. The company has produced more than 1,160 aircraft for customers around the world since 1958. To meet the aviation needs of its customers, Gulfstream offers a full range of aircraft products and services, including the Gulfstream IV-SP®, the ultra-long range Gulfstream V®, the new Gulfstream V-SP®, Gulfstream Shares®, Gulfstream Financial Services, Gulfstream Lease®, Gulfstream Pre-Owned Aircraft Sales®, Gulfstream Charter Services®, Gulfstream Management Services® and Gulfstream ServiceCare®. The company employs more than 8,300 people at eight locations.
General Dynamics, headquartered in Falls Church, Va., has leading market positions in business aviation, information systems, shipbuilding and marine systems, and land and amphibious combat systems. The corporation employs approximately 44,000 people worldwide and has annualized sales of approximately $10 billion.
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Any "forward-looking statements" contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
General Dynamics Corporation (ticker: GD, exchange: NYSE)
News Release - Thursday, October 26, 2000
Press Contact: (912) 965-7372
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