After a profitable FY2009, Pilatus confirms new model
In Pilatus’ 2009 annual report, chairman and CEO Oscar Schwenk had good news for shareholders who might have expected negative results as a consequence of the economic crisis. In addition to reporting a record delivery of 100 PC-12s, the Swiss company announced it had achieved its highest profit ever, and had received its largest single order ever–for 25 PC-21 trainers with associated ground equipment for the United Arab Emirates Air Force.
While the outlook is more subdued, Schwenk said Pilatus had a substantial order backlog at year-end. Also, for the first time, he publicly mentioned the company is developing a new aircraft for the civilian market, declaring that it is “not a replacement for the PC-12, but a contender in a higher market segment.”
The single turboprop PC-12 remains Pilatus’ main moneymaker and the manufacturer expects it will stay on the market for many years. One of its earlier models, the utility PC-6 TurboPorter, was introduced half a century ago and is still in production, albeit in small numbers. In its latest version it comes equipped with a Garmin glass cockpit.
The PC-12 was upgraded in 2008 to become the PC-12 NG, with a more powerful engine, higher performance, upgraded avionics and an improved cabin. With a price tag of about $4 million, more than some very light jets, the NG version has been well accepted by the market. Most PC-12s are sold with a six-passenger executive cabin, but all come with a large cargo door allowing loading of bulky loads if seats are removed. Pilatus also expects to reach a major milestone– delivery of the 1,000th PC-12–before the end of next month.
Despite the ongoing recession, Pilatus enjoys good financial health. With overall sales of CHF 620 million ($579 million) in 2009, down from CHF 661 million ($618 million) in 2008, the group achieved earnings before interest and taxes of CHF 78 million ($73 million), up from CHF55 million ($51 million) in the previous year. The company had an order book value of CHF 1.03 billion ($964 million) at year-end compared with CHF 1.2 billion ($1.12 billion) a year earlier, still well above the annual revenues.
Schwenk, who has led Pilatus for many years, conceded that sales currently are sluggish, but he said he hopes the backlog will carry the company through the recession without the need to reduce production. Pilatus reduced work schedules and avoided making layoffs in production last autumn and now intends to hire about 100 additional staff before the end of the year. Total employment stood at 1,330 at the end of 2009, with 786 in production and 353 employed in research-and-development work.
Like most European airframers, Pilatus’ work environment is expensive. In an effort to cope with pressure on prices, in March the company signed a 10-year agreement with PZL Swidnik SA in Poland for production of PC-12 subassemblies using components supplied by the Swiss manufacturer.
PZL was recently acquired by AgustaWestland, and is described by Pilatus as an industrial partner capable of meeting the highest standards of quality. Pilatus also noted that the agreement will provide additional capacity to step up the production of the PC-12 in times of increasing market demand. The Swiss company has had a similar agreement with OGMA (Industria Aeronautica de Portugal) for many years with good results.
As an industrial group, Pilatus has three divisions: business/utility aircraft (PC-12); maintenance (which includes manufacturing the PC-6 in small numbers), with facilities in Stans and Altenrhein; and government aircraft (military trainers: PC-7, PC-9 and PC-21). The company maintains facilities in the U.S. and Australia, but generally relies on distributors for the sale of its civilian products.
Founded in 1939 as a manufacturer of military trainers, Pilatus has progressively shifted production toward general aviation. In 2009, the PC-12 had a share of 71.67 percent of total sales; trainer business amounted to 17.4 percent; and maintenance, 10.3 percent, with subcontracting at a modest 0.7 percent. In addition to the delivery of the aforementioned 100 PC-12s last year, the airframer also delivered five PC-6s, but no trainers. It now is working on the batch of 25 PC-21 trainers for delivery to the UAE in 2011.
Speculation about the development of a new aircraft, now confirmed by Schwenk, has been rumored for some time. Two years ago, Pilatus severed distributor contracts for the PC-12 with ExecuJet because the now-defunct Grob SPn, offered at the time through Grob’s sister company ExecuJet, might compete with a PC-12 follow-on aircraft. This confirmed speculation that a future Pilatus twin–turboprop, jet or with a new kind of ducted fan engine–could be in the eight- to 10-seat, $8- to $10-million class and possibly be showcased at EBACE within the next two to three years.