Gulfstream, Jet Aviation Set for Growth, GD Says
“We’re seeing a gradual improvement in the business jet market,” Jay Johnson, the chairman and CEO of Gulfstream and Jet Aviation parent General Dynamics, noted yesterday during the company’s second-quarter financial conference. “Gulfstream flying activity is up and we’re seeing a 16-percent increase in aircraft service sales…The industry has turned the corner.” The aerospace division reported $1.38 billion in revenues in the quarter, “down modestly” from the $1.41 billion in the same period last year–a result of fewer pre-owned sales and completions at Jet Aviation–while profits increased 8.4 percent to $233 million. Aerospace backlog stood at $17.4 billion as of June 30, down $700 million from March 31. This includes orders for 250 G650s and an 18- to 24-month backlog–the “sweet spot,” according to Johnson–for G450s and G550s. Defaults are also down significantly, he said, with orders now outpacing defaults three to one. Johnson reaffirmed that Gulfstream will ship 76 large-cabin jets this year and upped his delivery forecast for midsize jets from 14 to 21 in 2010. In the second quarter, Gulfstream delivered 28 green aircraft (20 large, eight midsize), two more than it did a year ago (20 large, six midsize). Johnson expects sales to rise by “low to mid single digits” this year, with “steady growth” in revenues next year as G250 and G650 deliveries start in the second half.