GAMA: deliveries slide in first three quarters

 - November 23, 2009, 6:09 AM

The third-quarter airplane shipment numbers released last month by the General Aviation Manufacturers Association (GAMA) starkly demonstrate the effect the economic downturn has had on the OEMs so far this year, following last year’s record deliveries. The industry posted declines in the jet, turboprop and piston segments, corresponding with the payroll reductions made by nearly all manufacturers, while total industry billings decreased by 23.5 percent, to just under $14 billion for the period. “The shipment and billings figures are a result of this difficult business cycle and reflect the impact of the weak economy,” said GAMA president and CEO Pete Bunce. He added, “Another contributing factor that has led to the disappointing year-to-year numbers is the unwarranted negative attacks on business aviation.”

During the first three quarters of the year, airframers delivered 615 business jets, a decline of nearly 38 percent from the 988 shipped during the same period in last year’s peak production year. A major portion of that deficit came from the demise of former VLJ maker Eclipse Aviation, which contributed 155 jets to last year’s three-quarter total but shut its doors before it could add to this year’s tally.

Among the major business jet manufacturers, Hawker Beechcraft showed the largest slowdown, moving from 104 jet deliveries in the first nine months of last year to 64 so far this year, a fall of 38.5 percent. Only the company’s Hawker 4000 exceeded last year’s production, increasing to eight from three.

Gulfstream saw its output decrease by more than 35 percent, to 74 deliveries during the first three quarters of this year after producing 115 aircraft in the same period last year. While deliveries of the Savannah, Ga.-based manufacturer’s smaller-cabin aircraft dwindled from 48 in the first nine months of last year to just 18 so far this year, its large-cabin offerings fared better, moving from 67 deliveries in the first nine months last year to 56 thus far this year.

“We’ve never seen such a tremendous divergence between the top half of the market and the bottom half,” said Richard Aboulafia, vice president of analysis at industry consultant Teal Group. “Normally, rising and falling tides move all boats, but this time the top end is holding up, and the best illustration we’ve seen is Gulfstream.” That trend appears likely to continue, with the OEM claiming that its large-cabin production is sold out for next year and for much of 2011 and 2012. “If you take a look at where our orders are coming from right now, the old tradition of the majority of these orders coming from North America is shifting and right now, under this current economic environment, the majority of our orders are coming from overseas,” Bunce told AIN. “Those people are demanding some of these longer-range types of aircraft to do the mission they want to do.” This trend was echoed at Bombardier, which despite posting a nearly 27-percent overall downturn in deliveries still handed over only 10 fewer of its large-cabin long-range Challenger 605s and Globals than it did during last year’s peak. That output was tempered by numbers from the company’s Learjet subsidiary, which saw deliveries down by more than 39 percent, continuing the general softening seen in the light to midsize business jet classes.

Even though it ramped up output of its Mustang VLJ by 30 year over year, for a total of 94 deliveries during the first three quarters of this year, Cessna still experienced a more than 34-percent decrease in the number of jets shipped. The Wichita-based airframer slashed production of its CJ2+, CJ3, Encore+, Sovereign and Citation X by more than half, while deliveries of the CJ1+ remained constant at 13.

The news from the business jet segment wasn’t entirely negative, as some airframers saw the first deliveries of new models boost their totals. Buoyed by the service introduction of its new Falcon 2000LX, Dassault experienced a more than 6-percent increase in overall deliveries over the same period last year. The French airframer also continued to increase production of its new flagship 7X and the 900EX EASy.

While Embraer saw a decline of more than 50 percent in deliveries of its Legacy 600, its production this year was augmented at either end of the scale by the arrival of the entry-level Phenom 100 and the delivery of the first Lineage 1000 bizliner. In its first year of production, Embraer has so far handed over 43 Phenom 100s, allowing the Brazilian OEM to more than double its business jet deliveries from 26 in the first nine months of last year to 56 in the same period this year.

The pressurized turboprop segment also experienced a slowdown of almost nearly 23 percent, with a total of 200 deliveries during the first three quarters of this year, 59 fewer than in the first nine months of last year. Hawker Beechcraft and Piper each saw a falloff of approximately 33 percent in their turboprop deliveries versus the first three quarters of last year. Italian airframer Piaggio reported a more than 30-percent increase in Avanti II output year over year, while Pilatus delivered 64 of its PC-12 turboprop singles in the first three quarters, three more than in the first nine months of last year. Daher Socata saw the number of TBM 850 turboprop singles delivered shrink by 45 percent from last year’s total of 42.

The piston airplane segment saw the worst erosion by far, with deliveries dropping nearly 60 percent, to 679 so far this year, from 1,646 in last year’s first three quarters. “Everyone is being proportionally affected by this downturn, but at the same time everyone is looking at the same indicators,” said Bunce. “There is the idea that we are somewhere at the bottom of the down cycle and that events out there could allow us to be able to ramp up gradually.”