Slide Continues for Business Aviation

 - August 30, 2011, 11:10 AM

The first six months of the year proved disheartening for those who hoped for an uptick in aircraft deliveries. According to first-half numbers provided by the General Aviation Manufacturers Association (GAMA), total industry billings were down 22.3 percent compared with the first half of last year, to $7.3 billion, from $9.4 billion, while total shipments were off 15.5 percent in that span. Overall, the numbers represent the 11th consecutive quarter the industry has faced without posting a year-over-year increase. “Emerging markets still hold promise for near-term sales activity and a jumpstart to the recovery,” GAMA president and CEO Pete Bunce told AIN. “While we expect international markets to be at the forefront of this recovery, we must recognize that reviving the North American and European markets are necessary for a full recovery and long-term growth.

In his search for a target for the industry’s woes, Bunce focused his ire squarely on the White House. “These negative shipment numbers demonstrate precisely how ill-timed and potentially destructive the Obama Administration’s rhetoric and policies toward corporate jets are for general aviation,” he said. The 261 business jets handed over in the first half of the year represent the lowest first-half total since the same period in 2004, when manufacturers delivered 238 airplanes.

“This administration has singled out business aircraft owners with political demagoguery,” said Bunce. “It is simply astonishing that they cannot connect the dots back to manufacturing jobs and realize they are doing more damage to an industry that has obviously not yet clawed its way out of this recession.”

Delivery Picture Bleak

OEMs saw an overall decrease in deliveries of 26.5 percent year-over-year. Of the major bizjet builders, those overseas saw the biggest drop-off from the first half of last year. While Dassault last year saw a 73-percent increase in deliveries over the previous year, the numbers were far different this time, as the French airframer pared its deliveries by more than half. The number of Falcon 2000LXs handed over dwindled by nearly two-thirds (from 16 to five) in the first half of the year, while output of the company’s flagship Falcon 7X dropped from 21 in the first half of 2010 to 12 in the same period this year. The manufacturer attributes the decline in 7X deliveries at least partially to a production slowdown while it fixed a problem with the trijet’s pitch trim system earlier this year (still awaiting confirmation on this from Dassault C.E.)

Embraer, which more than doubled its output in last year’s first-half, reversed that trend with a decrease of more than 48 percent this year. The São Jose dos Campos-based OEM slashed the production on its very light Phenom 100, from 51 to 12 year-over-year, while increasing deliveries of its larger Phenom 300 and its large-cabin Legacy 600/650.

Bombardier, which saw an overall decrease of nearly 16 percent in deliveries in the first half of this year, reduced output in all its models except for its Learjet products. The 40XR/45XR deliveries increased from 9 to 13 in the first half of 2011, while the number of Learjet 60XRs handed over remained static at six.

Cessna delivered 69 business aircraft in the first half. The Wichita OEM reported a nearly 7-percent decrease in total jet deliveries. Continuing the trend in very light jet cutbacks, deliveries of the Mustang dropped from 41 in last year’s first half to 23 in the same period this year. Production of the CJ4 continued to ramp up with deliveries rising year-over-year to 16 from three, while those of the Citation XLS+ increased from seven to 11 in the same period. Overall, the company saw increased deliveries in four of its nine jet models, while two remained the same.

Gulfstream experienced a 16-percent delivery decrease this year based on erosion in demand for its smaller aircraft types. Deliveries of the G150/200 slipped by nine from the first six months of last year, though the company’s larger-cabin offerings held their own with 40 deliveries in the first half of both years. Jay Johnson, CEO of parent company General Dynamics, said in its first-half earnings call that the airframer is on track to deliver 80 large-cabin and up to 20 midsize jet this year and would not discount the first green deliveries of the ultra-long-range G650. He also noted Gulfstream’s second-quarter orders were the best the Savannah-based manufacturer has seen since the start of the economic downturn.

On its business jet side, Hawker Beechcraft delivered six fewer jets than in the first half of last year, with the biggest decreases coming from the Hawker 900XP and the Hawker 4000, which saw its deliveries halved from eight in the first half of 2010 to four this year. In the company’s second-quarter earnings call, chairman and CEO Bill Boisture said supply disruptions involving certification of a new version of software for Honeywell’s Epic avionics suite affected Hawker 4000 deliveries. He said the situation should resolve in the second half of the year but expects it will result in fewer deliveries than planned for the year.

In the bizliner class, Airbus and Boeing both saw fewer deliveries year over year as well, with the Seattle company handing over just one BBJ in the first six months of the year.

According to GAMA, the overall turboprop segment saw a decrease of nearly 9 percent, but that drop did not apply to pressurized turboprop aircraft, the deliveries of which increased by 8 percent. Production difficulties “reflective of the transition of the supply chain for the King Air out of our Kansas-based facilities and into either third-party suppliers or to our own Mexico facility,” affected the output of King Airs, said Hawker Beechcraft. Nonetheless, the company raised its number of deliveries of the turboprop twins from 34 in the first six months of last year to 40 through June of this year.

Daher-Socata had a 33-percent delivery fall-off year-over-year, with the number of TBM 850s handed over sliding from 18 to 12. Swiss airframer Pilatus saw no deterioration in its deliveries, handing over 25 single-engine PC-12s in the first half of each year, while Piaggio added one aircraft to its total from the first half of last year. Piper boosted deliveries of its Meridian from eight in the first half of last year to 14 through June of this year, an increase of 75 percent.