The formerly dominant North American market for large business jets is showing signs of regaining market share, according to U.S. manufacturer Gulfstream Aerospace (Stand 7061).
Here at the EBACE show on Sunday, Gulfstream said 60 percent of its first-quarter sales came from the U.S. compared to 40 percent for international sales. Last year at this time, 70 percent of Gulfstream sales were outside the U.S.
“The U.S. is coming back strong, particularly the Fortune 500 [companies] replacing fleets. We’re getting orders of more than one airplane at a time,” said Larry Flynn, Gulfstream president. “This verifies that there is a pent-up demand from companies. They just went dormant for three years and are now back in the fleet-replacement business.”
Improving market conditions contributed to a 20-percent increase in revenue to $1.62 billion during the first quarter within the General Dynamics aerospace division, which includes Gulfstream and aviation services company Jet Aviation. Gulfstream delivered 26 aircraft in the quarter compared to 20 the previous quarter, which included “green” G650s for completions and production G450/550s.
The large-cabin, long-range G650 has completed company flight testing, and is on track for full certification by the U.S. Federal Aviation Administration in the third quarter this year, with deliveries to follow. The super mid-size G280 is on a parallel certification track. Flynn said Gulfstream made a “last-second” decision to pull the aircraft from their program schedules and fly them to Geneva for EBACE debuts (see page one).
The recent lapse in U.S. business jet sales relative to the rest of the world is evident in the number of Gulfstreams already in service. In the last decade, the proportion of the fleet located in the U.S. has declined from 83 percent to 68 percent. In addition to the U.S. market, Flynn noted improving sales activity in northern Europe, steady business in Russia and the growing importance of Turkey as a market for business jets. “We’re clearly more of an international company, which puts more emphasis on our expansion of product support to stay ahead of this fleet growth,” he said.
Gulfstream is in the midst of a $500 million expansion that will add production, product support and engineering capacity at its Savannah, Georgia headquarters. The manufacturer has hired 700 people so far this year, the majority in Savannah, Flynn said. It is spending $23 million to double the capacity of its Northeast U.S. factory service center in Westfield, Massachusetts, and is adding 150 jobs there.
Last year, Gulfstream doubled capacity at its service center in Luton, UK, which services more than 1,000 Gulfstreams a year. That facility will be the first international service center for G650s and G280s.
Gulfstream Beijing, a joint venture with Chinese charter firm Deerjet and the Grand China Aviation Technik maintenance organization, is in the process of obtaining a business license in China and Part 145 aircraft maintenance organization certification, said Mark Burns, president of Gulfstream product support.