Business jet shipments reach an all-time high

 - March 6, 2007, 10:56 AM

Shipments of general aviation aircraft last year increased significantly over 2005, resulting in record highs in billings and in business jet deliveries.

According to the General Aviation Manufacturers Association (GAMA), member OEMs shipped 4,042 piston and turbine airplanes, 12.9 percent more than the 3,580 delivered the previous year. The record high for billings totaled $18.8 billion, a 24.1-percent increase over 2005. All the major turbine business airplane manufacturers reported more shipments, with Bombardier, Cessna and Gulfstream setting delivery records.

With record deliveries, orders and backlogs, last year was an “incredible year” for Cessna, said Lewis Campbell, chairman, president and CEO of parent company Textron. “We enter 2007 with an unprecedented situation at Cessna. We are 100-percent sold out for this year’s delivery plan, which we have increased by five units [to 375 Citations], which includes 40 Mustang VLJs.”

Looking toward next year, Campbell said Cessna has orders for more than 350 Citations. While the company will boost sales efforts for the Mustang, he also noted that the earliest available delivery for new orders for the Mustang is now the fourth quarter of 2009. Last year Cessna delivered 307 Citations (three more than forecast and topping the previous high of 306 in 2001), received orders for 496 Citations, including 231 in the fourth quarter, and expanded backlog by 35 percent.

Gulfstream delivered 113 green jets last year, 27 percent more than the 89 shipped in 2005 and exceeding by 12 the previous record of 101 deliveries set in 2001. Orders also increased by about 27 percent. According to year-end figures released by Gulfstream parent General Dynamics (GD), the OEM last year took orders for 159 aircraft, compared with 124 in 2005.

GD chairman and CEO Nicholas Chabraja said, “In 2007 we expect Gulfstream again to experience considerable sales growth of between 17 and 18 percent.” The expanding market is being driven by increased demand from outside North America, said Chabraja. He said last year 42 percent of sales were from non-North American customers; in 2005 it was 34 percent and in 2004 it was 30 percent. The company last year shipped 71 “large aircraft” (G350 through G550) and it is “scheduled” to produce 79 large aircraft this year, 82 next year and 83 in 2009.

Two member OEMs of giant European company EADS also reported notable delivery and sales figures. Airbus delivered 10 ACJs last year and is already well positioned
to exceed that number this year. According to the European OEM, by the middle of last month it had orders for nine ACJs. Total sales since the ACJ line was introduced stood at “around 80 aircraft” at press time. Socata reported it delivered 42 TBM 850 turboprop singles last year, compared with 31 TBM 700s in 2005. The manufacturer is targeting 50 deliveries this year.

Brazilian airframer Embraer reported that it delivered 27 Legacy 600s last year, more than double the 13 shipped in 2004 and seven more than delivered in 2005. Legacy 600 deliveries have grown steadily since the company handed over the first three aircraft to customers in 2000.

Piaggio made a remarkable recovery from its delivery slump in the first nine months of last year. The Italian OEM delivered 19 Avanti IIs last year compared with 13 Avanti Is in 2005.

Dassault Aviation announced record results for Falcon business jets for the second consecutive year. Firm sales for 158 jets were received last year. “Driven by growth outside North America, the worldwide market for business jets remained impressive in 2006,” said the company. “It wasn’t long ago that 40 percent of our sales came from outside the U.S., but that number has grown to more than 60 percent this year, primarily by Western Europe.”

At the end of last year, Dassault said it had a total backlog of more than 300 Falcons, including more than 150 for the 7X. The company projects that it will deliver more than 80 aircraft this year, compared with 61 last year. “Delivery rates will continue to increase” next year. FAA and EASA certification of the 7X are expected soon, with first deliveries in the second quarter. The next available delivery position for a 7X is mid-2011.

GAMA chairman Dr. John Grisik cited factors that contributed to the banner year: “Worldwide economic growth, a strong export market, and increased use of general aviation for both business and personal use all played a part in this outstanding year for general aviation.” Dr. Grisik added, “GAMA anticipates another robust year for general aviation in 2007 and beyond.”

Despite these impressive figures, the percentage growth of all general aviation aircraft types, except for pressurized turboprops, was less last year than 2005’s increase over 2004. For example, the 885 business jets delivered last year represented an 18-percent increase over the 750 shipped in 2005, while the 750 jets shipped in 2005 represented 27 percent more than the 591 delivered the previous year.

GAMA’s Near-term Outlook
This year and beyond, GAMA anticipates a continuation of three significant factors that have historically contributed to robust growth of general aviation worldwide. “First, sustained growth in national, regional and local economies is increasing demand for business-related transportation of passengers and cargo.

“Second, because airlines cannot satisfy the demand for business-related and personal transportation, especially in smaller communities, more individuals and companies will turn to general aviation to save time and increase productivity. Finally, innovative technologies that are being incorporated into new GA airplanes will continue to increase the margin of safety, as well as yield operating-cost efficiencies and greater airplane performance.”

Because these factors are expected to remain unchanged in the near future, shipments of GA airplanes of all types are expected to be strong this year.

The U.S. remains the largest producer of, and market for, GA products. “Nevertheless, as other world regions experience rapid economic growth, they will account for an increasing proportion of the worldwide shipments of new GA airplanes,” GAMA believes.

“At the same time, the industry is keenly aware of issues that could slow this positive trend, and in one case possibly cause long-term damage. The threat of user fees on the aviation industry by way of the upcoming FAA reauthorization legislation remains GAMA’s number one challenge”.

Last year’s delivery numbers and the high level of orders already taken for this year and beyond continue to indicate a healthy industry. Last year was also a milestone for the very light jet segment. Initial deliveries of the new Citation Mustang and Eclipse 500 started in the fourth quarter.