This year’s deliveries off to a flying start
Deliveries of business jets and turboprops in the first quarter of this year jumped about 20 percent compared with deliveries in the same period last year, despite mixed results by the major OEMs, according to statistics the General Aviation Manufacturers Association (GAMA) released recently.
The GAMA report shows that 138 jets were delivered in the first three months of this year versus 115 at this time last year, but Dassault delivered just five aircraft this year compared with 11 during last year’s first quarter. Boeing reported no deliveries of BBJs, compared with two last year at this time. A company spokesperson told AIN “This is largely due to the timing of orders and the production positions available.” There were 81 BBJs in service at press time and three more in completion centers, but deliveries have been dropping noticeably since 2001. “We will have quite a few BBJs delivered in the next 18 months,” the spokesperson said.
Airbus, which in 2003 stopped providing ACJ delivery figures to GAMA, reported in its latest quarterly newsletter that one ACJ was among the 16 A319s delivered in March. GAMA figures show Airbus delivering 15 ACJs between 1999 (when the airplane entered service) and 2002, but Airbus claims it has delivered some 30 ACJs. According to the company’s Web site, Airbus sold two ACJs last year.
Bombardier’s 43 deliveries were 26 percent more than the 34 aircraft shipped in the first quarter of last year. Initial deliveries of the new Global 5000, Challenger 300 and Learjet 45XR, as well as two CL800s (the corporate version of Bombardier’s regional jet) accounted for the majority of the improvement. Deliveries of both the Learjet 40 and the Global Express decreased.
Cessna Tallies Largest Gain
Cessna delivered 54 Citations in the first quarter versus 33 a year ago, a 67-percent improvement and the largest increase by far of any of the major OEMs. New models are driving Citation deliveries. Nearly 40 percent of Citations shipped in the quarter consisted of the CJ3, XLS and Sovereign–all new within the last year. First-quarter deliveries of the Citation X continued at a slow pace–one this year versus none last year.
The Wichita manufacturer said it booked orders for 73 Citations in the first quarter–better than the company had forecast internally and “in spite of the fact that we have little inventory available for delivery in the near term.” Cessna said at press time it had 230 Citations on order for delivery next year and plans to deliver between 235 and 240 jets this year (compared with 181 last year).
Top company officials claimed they are not worried that long delivery lead times for some Citations might open the window for competitors that can deliver their products sooner.
During the market slowdown in 2002, “A lot of our suppliers either went bankrupt or got out of the business,” officials said. “We have had to [re-establish] the supply base. That’s coming along more nicely than we thought. We’ve taken deliveries up this year based on that improvement. We should see steady progress.” According to management, Cessna could increase production to about 350 jets a year “without adding bricks and mortar” except possibly another paint shop.
Dassault in the first quarter shipped only five airplanes–one each Falcon 50EX, 900C and 900EX EASy, and the first two examples of the new 2000EX EASy. Last year in this period Dassault shipped 11 aircraft. The uncharacteristically low figure this year stems from production cutbacks announced two years ago, according to Dassault Falcon Jet. The company “fully anticipated [lower deliveries] as the result of circumstances that were set in motion a couple of years ago when we cut production during the industry downturn, and it just so happens that the first quarter of 2005 took a lot of that,” a Dassault Falcon Jet spokesman told AIN. “There are no manufacturing problems in France; there are no completion problems in the U.S. It’s just a quirk,” he added.
“It takes time to make the cutback,” the spokesman said. “It happens over a span of 18 months to two years.” Dassault Falcon Jet declined to comment on its projected number of deliveries for the rest of the year or the status of sales, saying information of that type has to come from top Dassault officials in France.
Gulfstream: General Dynamics’ Shining Star
General Dynamics (GD) singled out its Gulfstream division for “superb performance.” According to GD chairman and CEO Nicholas Chabraja, the Savannah, Ga.-based OEM had significant growth in virtually every segment: sales, deliveries, earnings, revenue, margins and backlog.
“I think our disciplined approach to cost controls and productivity continues to pay extraordinary dividends,” he said. Chabraja added he thought Gulfstream’s performance was “particularly impressive” in light of what he described as a “disadvantageous product mix” in deliveries.
In last year’s first quarter Gulfstream delivered 17 aircraft, 13 of which were large-cabin and four were midsize. Of the 13 large-cabin aircraft, only one was a “reduced-range” aircraft (either a G500 or G350). Gulfstream classifies the reduced-range and midsize models as “lower margin” aircraft, of which the company delivered just five out of the 17 in the first quarter last year.
In the same period this year, the company delivered 20 aircraft, 14 of which were large-cabin–one more than a year ago–but five of those were reduced-range versions and six were midsize. Therefore, of the 20 aircraft delivered this quarter, 11 are what GD views as lower margin compared with five in the first quarter last year.
“We were down the delivery of one G550 compared with a year ago,” Chabraja disclosed. “We had eight in 2004 and seven this quarter. Yet we’re going to produce several more G550s than we did a year ago, so we expect that the higher-margin aircraft are going to load up late in the year.”
Although Gulfstream has received orders for only two new aircraft from NetJets in more than a year, the backlog for the fractional operator continues to trickle down as Gulfstream makes deliveries on prior orders.
Raytheon Making Good Progress
Raytheon Aircraft also had an excellent quarter. “This quarter is the first time in 10 years in which Raytheon Aircraft is both profitable and cash-positive at the end of quarter one,” said Raytheon Aircraft chairman and CEO James Schuster.
“That’s a pretty good sign that the business is making good progress.”
The company reported deliveries of 27 Hawkers, Premiers and King Airs in the first three months of this year versus 18 in the same period last year, an increase of 50 percent. Firm sales of these product lines in the first quarter increased more than 20 percent–from orders for 28 aircraft to 34 aircraft quarter over quarter, according to the company. Raytheon’s revised forecast is for delivery of 243 of these models this year–about 30 aircraft more than the company actually delivered last year.
Raytheon said it is about two-thirds sold out for this year versus about one-third at the same time last year. These figures exclude the tentative agreement for NetJets to buy 50 Horizons. Raytheon expected to book that order before the end of this month.
“We are starting to fill slots for next year. [We have] a much healthier backlog book-to-bill situation than last year at this point,” Schuster said. “About the same number of aircraft were booked quarter over quarter but backlog value is higher.”
Meanwhile, the Hawker Horizon has yet to complete full certification. The twinjet received provisional certification in January and still must obtain FAA certification for avionics software and flight into known icing, expected by the end of the summer. Although Raytheon reported a firm backlog for 32 Horizons at the end of the first quarter, the company plans to deliver just one aircraft this year in keeping with its previously announced plans to bring the new model into the fleet slowly and methodically in hopes of a virtually bug-free introduction.
Thanks mainly to Pilatus and Raytheon, business turboprop deliveries also climbed about 20 percent–from 29 in the first quarter last year to 35 in this year’s first quarter. But Piaggio and Socata recorded fewer deliveries of their respective propjets this year than last year. Piper deliveries were unchanged quarter over quarter.
Total billings for the period, including the value of piston aircraft, increased more than 14 percent–from $2.4 billion to $2.7 billion. “Strong industry billings speak for the overall health of the general aviation industry and importance of private aviation as part of the world’s transportation system,” said newly installed GAMA president and CEO Pete Bunce. “With each new airplane certified and delivered to a customer, we introduce new safety-improving technology into the airspace system.”