Billings up, but pistons dragged down shipments

 - February 26, 2009, 9:46 AM

For the first time in five years, worldwide shipments of general aviation airplanes decreased in 2008, even as industry billings reached $24.8 billion, a 13.4-percent gain over 2007.

The General Aviation Manufacturers Association (GAMA) attributed the increase to order backlog, reflecting the filling of orders placed for turboprops and business jets during the strong economic years of 2006 and 2007.

Shipments, meanwhile, dropped 7.1 percent from 4,272 in 2007 to 3,969 in 2008, and GAMA chairman Mark Van Tine acknowledged that the GA manufacturing industry is feeling a significant impact from the slowing worldwide economy.

“Many of GAMA’s member companies have been forced to reduce their work force as they manage backlogs to compensate for the weakness in orders,” he told industry officials and media attending GAMA’s Annual Industry Review and Market Outlook Briefing in Washington, D.C., last month.

“While our industry is challenged in the current economic climate, we are focused on planning for a stronger future,” said Van Tine, president and CEO of Jeppesen. “The world’s economy depends upon a robust air transportation system and general aviation is absolutely a vital component of that global system.”

Despite looming financial storm clouds last year, Cessna formally launched its large-cabin Citation Columbus, Gulfstream unveiled its wide-cabin G650 and super-midsize G250, Embraer launched its midsize Legacy 500 and mid-light Legacy 450, and Dassault gave the go-ahead for its SMS Falcon.

“Our industry’s continued investment in research and development of new products is unprecedented,” said Van Tine. “We have learned from history that investing smartly in our future and that of our customers is the best way to build our way out of tough economic times.”  

The piston airplane segment dragged down the delivery numbers in 2008, with 2,119 aircraft shipped last year compared with 2,675 in 2007. Turboprops experienced the strongest growth in 2008, with shipments up nearly 17 percent; 535 turboprops were shipped, up from 459 in 2007. Business jet shipments reached a new high in 2008 with a total of 1,315 delivered, up 15.6 percent over the previous year’s 1,138.

Of the aircraft manufactured in 2008, the majority–3,252–went to North America. Thirty-eight went to South America, 576 to Europe and 103 to the rest of the world.
In the weeks before the GAMA gathering, the news has not been so upbeat. While General Dynamics reported that sales of its Gulfstream subsidiary’s large-cabin business jets are holding strong despite the economy, sales of the midsize G150 and G200 “dramatically softened” since the middle of last year.

While Gulfstream’s backlog has slipped slightly year-over-year, parent GD said that order intake is “stronger than expected,” due to more orders for large-cabin jets.
Cessna delivered a record 466 jets last year, but the company announced another 2,000 job cuts in late January and lowered its 2009 delivery estimates to 375 aircraft. Bell Helicopter, another Textron subsidiary, predicts delivery of 180 commercial helicopters this year, a conservative increase from last year’s tally of 167. Both divisions posted increases in their backlogs over the year, with Cessna’s rising $1.9 billion to $14.5 billion and Bell’s increasing by $2.4 billion to a total backlog of $6.2 billion.

Dassault is slowing the planned production ramp-up for its Falcon business jets this year due to the downturn. The target production rate of 10 Falcons per month that was to be reached late this year is thus being reviewed. Last year the rate was close to eight airplanes a month.

The French manufacturer’s management team, in January, announced to its joint production committee that “the current state of the economy is impacting the company,” according to a union source who added that senior executives said the situation is “not catastrophic.” The company still expects to deliver more Falcons this year than last year.

Hawker Beechcraft announced plans to lay off 2,300 employees– nearly a quarter of the company’s 9,300-strong workforce–and then reported a $139.9 million loss after taxes. Most of the affected employees were given 60-day notices on January 30, just 91 days after 490 others were let go. However, the company said 2008 deliveries of aircraft reached 441, compared with 430 in 2007, and production was affected by a four-week IAM strike in August.

Bombardier is forecasting total aircraft deliveries for the 2009/2010 fiscal year to be slightly less than for the 2008/2009 fiscal year, with about 10 percent fewer business jets and more commercial aircraft. The company delivered 239 business aircraft in FY 2008/2009, which ended January 31. Because the company is experiencing greater deferrals and cancellations, it is cutting production rates for its Learjet and Challenger lines. That is expected to eliminate 1,010 temporary worker and subcontractor positions and 350 permanent positions in Montreal, Wichita and Belfast.  &nbs