OEMs Outline Market Standing at J.P. Morgan Event

AINalerts » March 11, 2014
March 11, 2014, 12:35 PM

At the J.P. Morgan Aviation, Transportation and Industrials Conference yesterday, leaders from Bombardier, Cessna and Embraer provided summaries of their companies’ standing. Following are some “takeaways” from the event. “Bombardier: The switch to the Learjet 70/75 and Challenger 350 should help Bombardier shore up business jet pricing. Bombardier completed high-speed taxi testing on the Learjet 85, so first flight is very close. The advantage of composites here is primarily lower costs with fewer parts. Bombardier thinks this will eventually translate into strong gross margins for the program.”

For Cessna: “Perspective on business jet market unchanged. Flattish overall, with Cessna growth from new platforms. Unit deliveries of Mustang (weakest part of the market + M2 cannibalization), CJ3 and CJ4 should decline [year over year]. New X deliveries likely to begin in Q2. Cessna pricing flattish [year over year]. Acquisition [of Beechcraft] should close by quarter end.”

Of Embraer, J.P Morgan said: “Management is cautiously optimistic about a recovery in business jet demand in the near to medium term. The introduction of Cessna’s M2 is not having a negative impact on demand for Embraer’s Phenoms. Embraer believes business jet margins can expand in the years ahead despite the introduction of the new Legacy [500/450] aircraft in 2014 and 2015.”

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