NBAA Convention News

Industry Perspective: With Mustang type certificate in hand, Cessna shifts focus to swept-wing CJ4

 - November 6, 2006, 11:35 AM

It was always going to be a close race, but in the end Cessna became the first manufacturer to obtain full FAA certification of a very light jet (VLJ), the new breed of compact business airplane that holds the promise of changing the industry forever. In crossing the finish line first, Cessna beat out Eclipse Aviation, which obtained full type certification for the Eclipse 500 on September 30, after receiving “provisional” certification in July. The holdup had to do with the Eclipse jet’s Avidyne avionics system. The Mustang flies with a Garmin cockpit.

 

But the Mustang’s certification and upcoming entry into service isn’t Cessna’s biggest news in Orlando. The company’s new CJ4, a clean-sheet design with a swept wing, managed to take the aviation world by surprise despite the fact that Cessna several weeks ago confirmed the airplane would be unveiled here.

 

Coming off the most successful year in its history, Cessna has decided the best way to ensure that its positive momentum carries over into the near-term future is to keep introducing new products. Cessna president Jack Pelton spoke with NBAA Convention News about the strategy, which he said could one day see the manufacturer going head to head with the likes of Gulfstream, Bombardier and Dassault in the long-range, large-cabin market.

 

 

Cessna had a great year in terms of deliveries and billings. In your view, how does the next year look?

 

This has been another record year for Cessna. Coming out of the downturn in 2003, we invested heavily in some new products–the Citation CJ3, Sovereign and XLS–and these positioned us for when the economy picked up last year. We’ve really benefited from that.

 

In fact, we actually have a current record backlog of more than $7 billion. We’re exceeding all of our records for business jet production and we’ve held our own on the single-engine production side. We view 2006 as being a very, very good year and 2007 will be even better as we’ve sold well into the year.

 

Longer term, new products seem to stimulate the market, and we’re going to continue in new products. So we still see 2008 as a growth year, but after that the economic visibility is less predictable, especially given the presidential election in 2008.
 

 

The Mustang was the first very lightjet to obtain full type certification. What advantage does this give Cessna?What sets the Mustang apart fromthe competition?

 

The Citation Mustang is being categorized as a VLJ because of the weight of the airplane. We’ve always contended that it’s a downward extension of our Citation family. This distinction is important because Citation customers get an airplane that not only meets its performance numbers but they also benefit from 24/7 service, a company of 12,000 employees and FlightSafety-provided training. Cessna also has an established worldwide infrastructure of Citation service centers and networks. So the value proposition for the Mustang is great–it comes with all of the services you’d get with the other Citations. It’s just fortunate enough to be at a weight and price point that’s new to us.
 

 

 

Who’s buying the Mustang?

 

We view the market for the Mustangas the same as the existing CitationJet market, which is split between owner-operators, charter operators and smaller businesses. Cessna sized its business plan to be profitable around these markets. We never even considered air taxis/limos or other concepts into our plan, so if these emerging markets become viable, the Mustang will fulfill the requirements for these operators, too.

 

The Mustang backlog is more than50 percent international, which is very unusual–the typical business jet market is 37 percent international. What we’re seeing is an initial trend of international operators because of the regulatory environments where aircraft users are taxed based on weight. The Mustang offers a lighter aircraft as a larger jet, which gives operators an advantage.

 

 

Could a Mustang derivative be launched in the next few years?

 

We certainly think so. Whenever Cessna brings a new product to market we always look at families of products and extensions because that optimizes our investment in the initial product. This is a winning strategy that Cessna has capitalized on for years.
 

 

Here at NBAA Cessna announced the CJ4. Is it just a stretched CJ3? Will it replace or complement the Citation Encore?

 

Unfortunately, before NBAA we had to tip our hand early that we’d be introducing the CJ4. We originally intended to make a surprise announcement at the show.

 

Many people believe that the CJ4 is just a stretched version of the CJ3, but it really isn’t. The CJ4 is actually a clean-sheet airplane. We’re manufacturing a new fuselage for the airplane as well as a new wing. So there are major differences from the existing CJ product line.

 

The new swept wing will make the CJ4 the fastest in the CJ family, and we’re improving the cabin comfort by doing some things that we’re not currently doing on the existing CJ line, such as incorporating wider seats. Eventually these cabin improvements could filter down to the CJ1+, CJ2+ and CJ3. We’ll also continue the tradition of putting the modern engineering and latest avionics intothe airplane. This makes the CJ4 a tremendous value.
 

 

Cessna also announced an upgraded version of the Citation XLS here at NBAA. What’s the plan for the new XLS+?

 

We’ve delivered more than 500 Citation XL/XLS airplanes, and it’s been a real winner. If you look at our existing backlog and production rates, the XLS is one of the mainstays of our Citation product line. We’ve now looked at adapting some modern technology to a tried-and-true product. The airplane will have the Rockwell Collins Pro Line 21 avionics system, which has served us very well in the CJ family and in the Encore+ that’s about to be certified. We’ll also add FADEC to the engines on the XLS+. We’ve taken a good product and have adapted new technologies to keep it a strong player into the future.
 

 

We’re again hearing rumors of a large-cabin Citation, which some are calling the Super X or Citation XII. Is this a market that Cessna plans to enter in the near future? If so, what kind of attributes will the larger Citation have to compete effectively? How would Cessna market a large-cabin jet in a segment now dominated by Gulfstream, Bombardier and Dassault?

 

Our large-midsize project is a step out of our tradition of waiting until we have a finalized configuration before revealing the aircraft. What we’re really doing with the cabin mockup that we brought here to NBAA is some market concept work. We’ve always believed that at some point we needed to grow our family of Citation jets upmarket because we need a product for our established Sovereign, XLS and Citation X customers to upgrade to.

 

We’re exploring what makes sense in the next category above these airplanes. We think we’ve solidified the fuselage cross section and cabin size and amenities. Now we have to define the performance characteristics, and we now have two performance concepts that we’ll present to interested customers. We’re coming to NBAA with the full intent of not announcing or launching the product–instead we want to get market feedback, similar to Oshkosh where we solicited feedback for our light sport airplane concept.
 

 

Speaking of the Citation X, how many have been delivered to date, and what is the market outlook for this airplane? Ten years after its introduction into service, why has no other competitor developed a product that matches or bests the X’s top speed of Mach 0.92?

 

We’re celebrating the 10th anniversary of the Citation X here at NBAA. We’ve delivered more than 250 of them, and one of the markets for the X that was not originally conceived was the fractional market. NetJets has been our number-one customer for the Citation X, and the airplane has served them well. It has also done well in the charter market.

 

The jet has done well because of its speed, which allows customers to be more productive on trips. The Citation X has served us well and does not have a head-to-head competitor because of its speed benefit. Like all of our other Citation products, we continue to look at upgrades that would help improve the X and its lifecycle. We don’t see any obsolescence of the X on the horizon, and we’ll continue to introduce improvements to things such as avionics, cabin amenities or performance.
 

 

Is Cessna interested in being involved with a supersonic business jet project?

 

We continue to participate in supersonic business jet research. Part of our reason for doing this is that it sharpens our overall technical skills and abilities for all of our products. It keeps our engineers on the leading edge of technology and wind-tunnel testing.

 

An SSBJ has some issues with it–market size and overland supersonic flight restrictions. Until the regulatory environment in the U.S. changes to allow overland supersonic flight, it severely restricts the market for an SSBJ–it’s too small for the investment that’s necessary. We continue to work with NASA and other agencies to learn about boom suppression and associated technologies. The regulatory environment could change if we could prove that there would be no negative effects of sonic boom over land.

 

I’m convinced that we’re on the verge of having this technology, but changing the regulations to allow supersonic overland flight is far more difficult than physics. We’re not currently partnering with either Aerion or Supersonic Aerospace International, and it’s very unclear who would be best to partner with on such a program. I don’t see anyone going it alone on an SSBJ project.

 

There have been several executive changes at Cessna over the past few months. How will these new appointments affect the company? What strengths do these new vice presidents bring that you hope to use to better position Cessna in the future?

 

We have not hired new vice presidents from the outside. Instead we’ve worked hard to develop our own internal talent.I wanted to ensure that we have a process in place to groom successors to keep Cessna viable for another 80 years.

 

The most recent changes that we made were promotions. Customer support senior v-p Ron Chapman recently retired after 37 years with the company, and he has been replaced by Mark Paolucci, who’s been with Cessna for more than 20 years in a variety of roles. This way we’re able to keep employee continuity and history, and we’re excited to be able to promote from within.

 

We’ve also recently done the same thing in our manufacturing operations. We made some changes to give people new experiences without having to hire from outside the company. We’re committed to the development of our people, and it has paid dividends. We have the best team in the aerospace industry, and I’m very happy with how the company is being run.