Rebecca Loranger has had a Learjet in the repair shop for months, and she’s not happy. The director of sales for Charlotte, N.C.-based Corporate Fleet Services, a dealer that trades in Learjets and other Bombardier corporate jets, brought a 10-year-old plane to a Bombardier service centre in Dallas for a pre-buy inspection on June 30. She expected it back within five weeks. As of last month, she’d been waiting 11. Even worse, the repair bill had jumped to US$90,000 from US$60,000. “It’s nothing short of a nightmare,” she said. “The right hand can’t tell what the left hand is doing.” At rival Gulfstream and Cessna facilities, she says, service would have been much faster.
This isn’t an isolated problem. In fact, Montreal-based Bombardier has a reputation for the worst after-sales service in the business that it can’t seem to shake. Its corporate jet division—whose high-profile customers include Oprah Winfrey and Bill Gates, Exxon Mobil and Wal-Mart, plus Russian oligarchs, Brazilian beef barons and an Asian casino magnate—may have almost single-handedly lifted the fortunes of the industrial giant. But for the past five years Bombardier has shown up dead last in the influential industry surveys of aircraft operators on customer support by U.S.-based journals Professional Pilot and Aviation International News.
The surveys track such categories as quality of service centres and how long owners are forced to keep malfunctioning planes grounded until the manufacturer can ship out spare parts. Nobody keeps Oprah waiting, so more than bragging rights are at stake. “You sell the next airplane with service on the current airplane,” says Murray Smith, publisher of Professional Pilot.
The results are sharply at odds with Bombardier’s standing as the industry leader in one of the world’s most elite businesses, which gathered for its big annual convention in Orlando this week amid fears of a global recession. Its Learjet, Challenger and Global planes list for between US$9 million and US$50 million, and the three lines accounted for billings of US$3.4 billion in the first half of 2008, up 24 per cent from a year earlier. The whole industry is undergoing an unprecedented boom, and the wait for some Bombardier models is now up to 46 months. “We expect demand to be strong for the next decade,” Bombardier’s aerospace chief Guy Hachey said this month.
But Bombardier’s reputation for poor after-sales service calls into question whether it can remain on top of the game. In the Pro Pilot survey, Bombardier placed last in six out of seven categories among the five main jet makers. The company didn’t fare much better in the AIN survey. Bombardier’s archrival, Gulfstream Aerospace, topped both surveys.
The rankings are especially disappointing because Bombardier has pulled out all the stops in the past two years in an effort to improve after-sales service. It has spent tens of millions of dollars to bulk up its spare parts inventory, launch 24-hour response centres and hire 17 more technicians. That investment seems to have yielded results. The company says it has cut the number of days it takes to respond to a customer warranty claim to seven from 19. Bombardier service centres enjoy a 92 per cent satisfaction rating according to a recent internal poll, up from 75 per cent. “Our goal is nothing short of providing our customers with a world-class experience—when compared across all industries—and we will continue to invest until we achieve our goal,” says James Hoblyn, president of customer services and support with Bombardier Aerospace. But a bad reputation can be a stubborn thing to shake.
The good news: AIN noted a significant improvement in rankings for Learjet in its survey, and many customers quoted throughout both surveys acknowledged the company’s progress. “Bombardier has been working very hard, but the rest of the world is not standing still,” says Smith. Said Hachey: “Obviously we’re not happy with the fact we didn’t make more progress” in the surveys. “We have re-energized [efforts] to improve the robustness of what we do.”
That’s good, because holding the crown for best service matters as jet makers expand sales internationally. Once a cottage industry, corporate jet billings tripled in the late 1990s, hitting a record US$12 billion in 2001. Billings surpassed US$18.4 billion last year and are expected to top US$30 billion annually within a decade, as wealthy buyers seek to avoid flying commercial. That is, so long as the world economy doesn’t completely tank.
Either way, Bombardier has its work cut out, starting with convincing long-time customers that things are improving. “I’m a [Bombardier] dealer, so I’ll always buy anything and everything out there,” says Loranger. But based on her recent experience, she worries, “another end user might steer clear.”
Thursday, October 9, 2008