GA deliveries up 19 percent over last year

 - December 5, 2006, 5:39 AM

General aviation manufacturers continue to show steady growth in deliveries and backlogs. According to the General Aviation Manufacturers Association (GAMA), airframe builders delivered 2,842 piston and turbine airplanes in the first nine months of this year–nearly 19 percent more than the 2,391 shipments made in the same period last year.

Deliveries of business turboprops scored the highest growth rate–29.3 percent (212 shipped in the first three quarters of this year versus 164 in the same time frame last year). Business jet shipments increased 23.3 percent (from 511 to 629 period over period). Industry billings were up 28.6 percent, to $13.2 billion.

All but three manufacturers had double-digit growth, with Boeing Business Jets recording triple-digit growth after shipping 10 BBJs in the first nine months of this year compared with just three in the same period last year. At the NBAA Convention in mid-October, the OEM said in the last 11 months it had received orders for 12 BBJs.

The three manufacturers whose shipments in the first nine months of this year did not increase over the same time frame last year were Airbus; the now-defunct AvCraft-Aviation, which delivered its last Envoy 3 last year; and Piaggio, which delivered only three Avantis in the period versus five last year.

Lack of new Avantis for delivery to Avantair is the primary reason that the fractional provider will record a loss of nearly $21 million this year, according to a recent SEC filing by the company’s new owners, Ardent Acquisition. The second half of Fiscal Year 2006 and the first quarter of Fiscal Year 2007 are “negatively [affected] by Piaggio’s inability to deliver its new aircraft model until July,” Ardent said in the filing. This results in “no new fractional sales revenue, oversold capacity resulting in higher charter and repositioning costs, and increased staffing costs in anticipation of new aircraft.”

Ardent said it received one Avanti in September and two in October. It now hopes to receive nine or 10 aircraft in the first half of Fiscal Year 2007 and seven or eight more in the second half. Avantair’s current fleet was about 25 at press time and the company had 58 on order, according to Ardent’s SEC filing.

At Bombardier, deliveries and sales of the Learjet 60 are slowly dwindling as that model is set to be replaced early next year by the 60XR, featuring Rockwell Collins Pro Line 21 avionics and an upgraded cabin interior to include redesigned seats that improve legroom, a larger galley and vanity cabinet and additional storage space.
To maintain the strong performance of its Challenger line, Bombardier is also getting ready to introduce into service the Challenger 605. In October the twinjet received type certification from the European Aviation Safety Agency, the FAA and Transport Canada. The successor to the Challenger 604 also features Rockwell Collins Pro Line 21 avionics and upgraded cabin features, including new, larger windows that are positioned about five inches higher in the fuselage.

Cessna’s Winning Formula
Despite limited availability of near-term delivery slots, order and shipment activity at Cessna in the first nine months of this year continued to be “extremely strong and is showing no signs of abatement anytime soon,” according to Lewis Campbell, chairman, president and CEO of Cessna parent Textron.

Cessna delivered 74 Citations in the third quarter and expects to ship 85 in the fourth quarter, to bring this year’s total to about 265. Speaking at the company’s third-quarter earnings conference in October, Campbell said, “During the third quarter we received orders for 100 Citations, about a third for next year’s delivery, which fills 100 percent of our 2007 delivery plan of 370 jets.”

With orders for more than 160 already booked in the fourth quarter (including 115 received at the NBAA Convention in October), Cessna is looking at finishing this year with contracts for more than 400 Citations. “On our last call we said that we expected a significant increase in deliveries in 2008,” Campbell said. “It’s safe to say that our view for 2008 is even stronger now than last quarter, given the sustained heavy order environment.”

Bookings for the company’s newest Citation, the CJ4, stood at 98 at the end of October. The aircraft won’t begin shipping until 2010.

With nearly half of 2008 already sold out, Cessna might see as many as 430 Citations shipped that year. Said Campbell, “We are entering a sustained era of product deliveries, revenues and record profits and unprecedented order visibility.”

At Dassault, sales and deliveries of the Falcon 2000 picked up slightly in the third quarter of this year, as did the Falcon 2000EX EASy. But shipments of the Falcon 2000 are not likely to increase significantly as potential customers anticipate its replacement, the Falcon 2000DX. The new airplane will have the EASy cockpit and a 3,250-nm range. First flight is planned for next summer, to be followed by type certification by the end of next year. Meanwhile, Dassault expects certification for the 5,950-nm fly-by-wire Falcon 7X early next year. At the end of last year, Dassault said it had a total backlog of more than 200 Falcons. “More than 60 aircraft will be delivered in 2006 compared to 51 in 2005,” the company said. “A similar delivery rate increase is planned for 2007.”

Short Final for Record Deliveries
Shipments of large Gulfstreams (G350 through G550) increased to 52 from 46 in the two nine-month periods, and deliveries of midsize/super-midsize jets (G100 through G200) jumped more than 50 percent, to 31 in the first three quarters of this year versus 19 in the same period last year. Assuming the company will easily ship at least another 19 aircraft in the fourth quarter, it would be looking at a record year, surpassing the 101 aircraft shipped in 2001.

As of October 31, Gulfstream said that more than 1,600 Gulfstream jets are in service.

“At Gulfstream, sales continue at the pace set last quarter, that is, in excess of a billion dollars a quarter,” said Nicholas Chabraja, chairman and CEO of Gulfstream parent General Dynamics. “We had intended to deliver 79 [large aircraft] in 2007, but we are reworking that [number] to see if we can handle 82. We are also looking at delivering 83 large aircraft in 2008, and looking at ways to elevate that somewhat.” But the increase apparently will have to continue to come from the company’s existing manufacturing space.

Gulfstream announced in March a $300 million, seven-year expansion of its manufacturing and service facilities in Savannah, but they won’t immediately provide needed capacity to increase production of current models.

“We will have a new factory in place at the end of 2008. It will begin operating in late 2008 or early 2009, with its first mission to build a prototype for a next-generation aircraft, then begin producing that aircraft subsequently. It will not provide relief for the current aircraft.” Chabraja said, “We will just have to work on [increasing] our capacity efficiently by improving our processes and helping our suppliers improve theirs.”

As for revealing any details about the next-generation Gulfstream model he referred to, Chabraja was blunt: “I have no further interest in saying anything about that.”
GAMA pointed to international sales as a key driver for increased deliveries and Gulfstream is a case in point. “Demand seems to be growing internationally at a greater rate than in North America,” according to Chabraja. “For example, in the third quarter only 54 percent of orders were from U.S. and Canada [customers], which is lower than typical. Twenty-two percent were from Europe and Russia, 9 percent from Latin America, and 7 percent each from the Middle East, Africa and Asia.”

Raytheon Aircraft also reported significant growth in international sales, the percent of which nearly doubled between 2004 and last year, increasing from 16 to 29 percent. International deliveries have increased 89 percent year-over-year.

Hawker 4000 Holds Back Forecast
Raytheon Aircraft delivered 39 jets and 36 King Airs in the third quarter of this year compared with 29 jets and 27 King Airs in the same period last year, bringing turbine airplane deliveries during the first nine months of this year to 186, compared with 145 for the period last year.

At the NBAA Convention in October, Raytheon said it took orders for 112 Beechcraft and Hawkers, including three Hawker 4000s.

The company is now forecasting that it will deliver 297 turbine airplanes–154 jets and 143 King Airs–this year. If that forecast is realized, the company will exceed last year’s shipments by 42.

However, Raytheon revised its forecast downward by five jets due to a “shift in planned deliveries of five Hawker 4000s from this year into the first part of next year,” said Raytheon. The model, Raytheon’s first attempt at certifying a Part 25 aircraft, was announced at the 1996 NBAA Convention and originally scheduled to receive type certification (TC) in 2001. Under a recently negotiated agreement with the FAA, the company expects to receive the TC before the end of this month.

Despite the aircraft division’s strong financial performance, Raytheon announced this summer that it is again considering selling the manufacturer. Raytheon said the sale of the division would not involve fractional provider Flight Options. At its third-quarter earnings conference call in late October, Raytheon declined to answer questions about the status of the sale.

Commenting on the third-quarter delivery and billings growth, GAMA president and CEO Pete Bunce said, “Our manufacturers have seen growth in all airplane segments, part of which we attribute to strengthening sales in Europe, and into Russia, China and India. Business people and government officials are recognizing the dynamic role that general aviation plays in building a vibrant economy and, as our manufacturers continue to bring new innovations to market, we expect this trend to continue.”