Airplane manufacturers report a record year in ’05

 - September 20, 2006, 7:45 AM

General aviation manufacturers last year posted an all-time record for billings and
a four-year high in new turbine airplane deliveries. According to the General Aviation Manufacturers Association (GAMA), billings of $15.1 billion on the shipment of 3,580 piston and turbine airplanes last year were a 27.2-percent increase from the $11.9 billion and 2,963 airplanes in 2004.

The 750 business jets delivered last year represented nearly 27 percent more than the 591 shipped in 2004 and the most since 2001, when 795 jets were delivered. The shipment of 279 pressurized turboprops last year was nearly 14 percent more than the 245 in 2004 and the largest number since 2001, when 332 pressurized turboprops were shipped.

Bombardier Aerospace led the increase by far, racking up a 45.7-percent growth in the number of business jets delivered and offsetting a slump in its regional jet deliveries. The company shipped 50 copies of the Challenger 300, introduced late last year. The 188 Bombardier business jets delivered last year were the highest number since the 207 shipments in 2000. “We are harvesting the fruit of many years of investment in the development of innovative aircraft platforms,” said Pierre Beaudoin, president and COO of Bombardier Aerospace.

This year, Bombardier is introducing the Learjet 40XR (successor to the Learjet 40) into the market and restarting production of its Challenger 850, a business jet version of the CRJ200, which has been out of production since last October as the result of diminished orders from regional airline customers. Production of the Challenger 850 is scheduled to start in the middle of next month. Bombardier declined to provide an estimate of how many business jets it will deliver this year or beyond.

Cessna delivered 36.5 percent more Citations last year than in 2004 and believes it can deliver between 295 and 300 jets this year, slightly more than its previous estimate of 290 and a 19-percent increase over the 247 jets delivered last year. The OEM plans to deliver 65 Citations in the first quarter of this year. If the manufacturer does deliver 300 Citations this year, it would be within six airplanes of its record 306 deliveries in 2001.

Cessna also delivered 86 Caravan unpressurized turboprop singles last year versus 64 in 2004.

Next year, Cessna expects to deliver 50 Mustangs (its first very light jet), followed by 100 in 2008 and 150 in 2009. In January Cessna said it has sold out of the Mustang through the third quarter of 2009 and expects to “exceed the 150 deliveries by the time we get to 2010, and maybe a little earlier.” Currently, the company’s best seller is the Citation XLS.

International sales are picking up for Cessna, too. “About 38 percent of sales are now to international customers,” the company said. “Typically, they have been in the mid- to high 20s.”

Cessna booked orders for 100 Citations in the fourth quarter, bringing last year’s total orders to 329 jets. “Of these, about 10 percent was from NetJets and about 4 or 5 percent was from CitationShares.” The company said it is sold out this year with orders for “a little more than 290” jets in hand. We also have nearly an identical number of orders for 2007.” At press time, Cessna claimed a total of 788 Citations on order.

An Up and Down Ride for Dassault
Dassault continued the roller-coaster ride it has been on for nearly a decade. Last year, the French manufacturer delivered 51 Falcons (the same number as in 1997), including two of its newest model, the Falcon 900DX (which replaces the 900C). The company delivered 63 business jets in 2004. Since 1997, Falcon shipments have fluctuated annually, reaching a record high of 69 in 1999 and a low of 49 in 2003.

The 2005 delivery report from Dassault is not unexpected. At last year’s Paris Air Show, Dassault Aviation chairman and CEO Charles Edelstenne projected Falcon deliveries would be between 50 and 55 for last year. Although he said then that economic conditions have improved “measurably” since 2004, he cited two reasons for fewer shipments. “The first was that we received orders for just 40 Falcons in 2003,” although 49 were delivered that year. And as a result of the accelerated depreciation tax credit for business aircraft buyers in the U.S., “a number of our customers brought forward deliveries that were initially planned for delivery in the early part of 2005.”

Despite fewer deliveries last year, Edelstenne referred to 2005 as “a high mark in the history of the Falcon program.” He reported that the company ended last year with record sales for 123 Falcon business jets–the first time the company has sold more than 100 Falcons in a single year, “and this without the benefit of multiple sales to fractional providers.”

At the end of last year, Dassault said it had a total backlog of more than 200 aircraft and expects to deliver “more than 60” aircraft this year. Edelstenne claimed that “demand is strong worldwide. Traditionally, about 60 percent of our sales have come from the U.S. This year, that percentage will be about 50 percent. It’s not a sign of a weakening market in the U.S, but a sign of strengthening demand globally.”

Meanwhile, significant increases in orders and deliveries promise to take Gulfstream business jets back to three-digit deliveries for the first time since the 101 shipments in 2001. Gulfstream said it took net orders for 121 jets last year, a 26-airplane increase over 2004. Based on these sales, the Savannah, Ga.-based OEM expects to deliver a record 111 business jets this year and 127 next year. Gulfstream delivered 78 green aircraft in 2004 versus 89 last year, a 14.1-percent climb.

The number of lower-margin midsize jets (G150s and G200s) is going to increase. Gulfstream said it will produce and sell about 50 percent more of those, from 26 this year to 39 next year. Most of that gain will come from the new G150, certified last year and put into production this year. Meanwhile, the company said production of large aircraft (G350, G450, G500 and G550) is sold out through the middle of next year.

At the current production level, customer wait time has again climbed to the heady years of the early 1990s–two or more years from sale to delivery, according to Gulfstream. The anticipated production-rate increase should help to reduce this interval.

No New Raytheon Forecast
While deliveries last year of Raytheon Aircraft turbine business airplanes increased over 2004, the number of deliveries fell short of company expectations. Raytheon Aircraft delivered 255 turbine business airplanes last year (141 jets and 114 King Airs) compared with 217 (115 jets and 102 King Airs) in 2004. This was an increase of 17.5 percent year over year, just short of Raytheon’s revised forecast of 267 turbine business airplanes.

Ironically, the company’s forecast before the revision (made in the third quarter of last year) was for 256 turbine business airplanes to be shipped last year. The company did not provide a revised outlook for this year, but Raytheon Aircraft chairman and CEO Jim Schuster said, “We are about half sold out [for 2006] on higher volume, and we are delivering 50-percent more airplanes than we did in 2003.” The 50 Raytheon 4000s that NetJets ordered in the third quarter are slated to be delivered between next year and 2015.

No deliveries were reported for the Hawker 4000 because full FAA certification of the super-midsize jet (née Horizon) slipped again (see AIN, February, page 4). Raytheon said it has firm orders for more than 80 copies of the $18.9 million business jet. Raytheon plans to deliver 11 Hawker 4000s this year, 16 next year, 24 in 2008 and 30 per year thereafter. The company also plans this year to put into production the new Hawker 850XP, the winglet-equipped successor to the Hawker 800XP.

Finally, Pilatus once again had the distinction of delivering more airplanes of a single model–the PC-12–than any other OEM by handing over 80 of the big single-engine turboprops.

“The outstanding 2005 shipment and billing figures demonstrate that general aviation is one of the brightest and most promising sectors of manufacturing,” said GAMA president and CEO Pete Bunce. “Our growth shows that general aviation continues to have a dramatic impact on the way the world does business,” he said. “As the worldwide economy expands and becomes ever more interdependent, general aviation will play an ever increasing role in making business soar.”

The association did not venture a guess about delivery figures for the future, although several res-pected forecasts (including those from Honeywell and Rolls-Royce) are projecting further increases over the next several years.

One of the most recent predictions to be revealed comes from UBS Investment Research. The New York company estimates that OEMs will deliver 827 business jets this year and 966 next year. These numbers do not include bizliners or very light jets, which are expected to start entering the marketplace later this year.