Industry on track for a record year

 - November 27, 2007, 5:52 AM

The General Aviation Manufacturers Association (GAMA) released its third-quarter shipment and billings report, showing good news for business aviation OEMs that already have record backlogs. As the industry adapts to a market where for the first time, more aircraft orders come from outside the U.S. than within, airframers delivered 2,909 piston and turbine aircraft in the first nine months of the year, 1.7 percent more than the 2,857 deliveries in the same period last year, while industry billings rose to $15.1 billion for an increase of 14.1 percent. “If we have another great quarter in the fourth quarter, we are going to have record sales from a monetary standpoint,” said Pete Bunce, GAMA’s president. “We’re watching each one of the different segments and we’re encouraged that when you take it in total everything is positive.”

The overall industry increase came in spite of a slump in piston-powered aircraft, deliveries of which dipped by 6 percent compared with the same period last year. Some industry analysts blame the decrease on the nascent VLJ industry, which could have prospective customers of high-end pistons rethinking their purchase plans.
The surging business jet category saw a jump of more than 20 percent in shipments. (All told, in the first three quarters of this year OEMs shipped 759 jets–including VLJs–versus 628 in the same time frame last year.)

VLJ manufacturers, while not yet living up to the heady predictions of hundreds of deliveries out of the gate, are finally starting to make their presence felt as production spools up. Albuquerque, N.M.-based Eclipse handed over 48 of its oft-delayed EA-500s–including 27 in the third quarter alone–while Cessna delivered 25 Citation Mustangs. The Wichita-based airframer saw its jet deliveries increase overall by almost a third, from 201 to 268.

Cessna, with a backlog of nearly $12 billion, says it is on track to deliver 380 jets this year and plans to increase that number to 480 next year, partly by more than doubling the number of Mustangs completed. “We’re doing a lot of work in making our operation more efficient, how we produce the airplanes and how we manage our supplier base. Our supply chain management has made tremendous strides in what they are doing to work with our suppliers,” said a spokesman, who added that Cessna’s achievements in this area were recently recognized by a supply industry trade organization.

Across town, Hawker Beechcraft delivered 199 turbine-powered airplanes, up from 186 in the same period last year. Led by shipments of a dozen additional Premier IAs, the increases in the third quarter could be found throughout the company’s product range. To further improve productivity, the Kansas manufacturer recently opened a light sheet metal facility in the rapidly growing aviation industry hot spot of Chihuahua, Mexico.

Bombardier achieved growth in most of its products, including the Global 5000/Global Express line. The Canadian-based OEM raised its deliveries of the long-range business jet by nine over the same period last year, for a total of 37 during the first three quarters of 2007. That trend continued with French airframer Dassault, which saw the largest delivery increase in its high-end Falcon 2000EX EASy, going from 17 shipped in the first nine months of last year to 24 in the first nine months of this year. Dassault also added the deliveries of two Falcon 7X trijets to this year’s total.

Over the first three quarters of this year Savannah-based Gulfstream increased production by more than 24 percent over the previous period, shipping 20 more aircraft, for a total of 103 worth more than $3.5 billion. Embraer, which received orders for 51 business jets at the Dubai Airshow–including seven Lineage 1000s, seven Legacy 600s, nine Phenom 300s and 28 Phenom 100s–increased the number of its Legacy 600s delivered, from 17 in the first nine months of last year to 21 in the same period this year. Next year, the Brazilian manufacturer expects to deliver between 30 and 35 Legacy 600s, 10 to 15 Phenom 100 VLJs and two Lineage 1000 bizliners. In 2009, the production rate of the Phenom 100 and 300 is projected to reach 120 to 150 aircraft combined, and the company plans to deliver four to six Lineage 1000s.

Coming off a strong performance last year with 10 BBJs and BBJ2s shipped in the first nine months, Boeing Business Jets saw that number decline to just four through the same period this year, while transatlantic rival Airbus increased deliveries of its ACJ family by three over last year, for a total of 10 so far this year. According to Boeing, its BBJ deliveries are cyclical, based on finding available slots for corporate aircraft amid its commercial production line and vary year-to-year.
The turboprop category also showed an increase of more than 12 percent in the first three quarters. Leading the way was Hawker Beechcraft, which saw increases across its entire King Air line. Including its first-quarter production under Raytheon, the company shipped 13 more of the twin turboprops than over the same period last year.

Piaggio delivered only three Avanti IIs in the first three quarters of last year, but the company said it shipped six of the twin pushers during the first half of this year. (Piaggio releases shipment numbers only twice a year.) That still puts it off-pace to match last year’s output of 19, which was considered below expectation then. Swiss manufacturer Pilatus experienced an 11-percent increase in January to September deliveries of its PC-12, turning out 68 of its single-engine turboprop, while Socata upped the output of its TBM 850 by only two over the same period last year.

Despite the positive industry forecasts, while the OEMs work to increase their output, lurking in the background is always the threat of an industry downturn, according to Bunce. “There is always concern, and I think everyone is aware of it. Everyone is trying to approach this in a smart fashion, to manage the backlogs and the expansion so that as the inevitable cycle happens, the valley of the cycle is as shallow as possible.”