Weak dollar helps boost Cessna’s international sales

By Stephen Pope

Farnborough Air Show >> July 2008
Business Aviation

In spite of the sagging U.S. economy, global credit crisis and record oil prices, business jet maker Cessna said sales activity remains strong as the cumulative effects of the weak dollar and stepped-up demand from international buyers help to offset such concerns.

The low value of the dollar against other currencies makes it the perfect time to buy for companies and wealthy individuals in Europe, Russia, the Middle East and other places outside North America with quickly expanding economies. And even with oil trading above $147 a barrel, interest in Citation models hasn’t slowed, say Cessna executives.

The company built 387 business jets last year and is projecting deliveries of around 470 this year. More than 40 percent of those have gone to international customers, a sharp rise from years past when 30 percent or less of sales came from outside the U.S. Orders from international buyers have reached an all-time high, presently hovering at around 55 percent, the company reports.

“I think the numbers are probably going to stabilize at around 45 percent on the international side going forward,” said Cessna president and CEO Jack Pelton. “We’re seeing a good long run, not just a temporary spike, and based on what we’re hearing it’s becoming less centered on the weak dollar and more a result of a need for business aviation in emerging parts of the world like Eastern Europe, Russia and India.”

Cessna sales executives are seeking to tap into the business jet market in the so-called BRIC countries, encompassing Brazil, Russia, India and China. Those countries have begun rapidly upgrading aviation infrastructure to handle an influx of private airplanes.

Despite the continued strong sales of Cessna business jets, which Pelton said he sees continuing into 2009, sales of the company’s single-engine piston airplanes have slowed in the last year. Pelton attributed the fall-off to high aviation gas prices and the credit crunch, which he said are putting a squeeze on buyers of light airplanes in the category of Cessna’s $387,000 Skylane. 

To help jump start sales, Cessna last week announced a program that will provide Skylane buyers with up to $15,000 worth of fuel through the end of next year and a free upgrade to the Garmin synthetic-vision system. The offer is good through the end of September.

Pelton said some Skylane buyers have decided instead to purchase the much smaller and fuel efficient Cessna Skycatcher, a two-seat airplane that carries a list price of around $110,000. “I think once people understand the speed of the airplane and economics, the Skycatcher is really going to catch on with people who are flying 300 nautical miles by themselves,” he said. “It’s a 120-knot airplane, which is as fast as a 172 but with a lot lower acquisition and operating costs.” To be built in China, the Skycatcher is due for certification and first deliveries next year.   

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