Strong sales in a niche market propel Pilatus to prosperity

 - December 6, 2006, 1:16 PM

Demand for the Pilatus PC-12 pressurized business/utility single turboprop remains at unprecedented highs. Pilatus reached the delivery milestone of 500 aircraft in January, 10 years after the program started. The company sold out this year’s delivery positions early, despite work around the clock in three shifts at the company plant in central Switzerland.

Pilatus delivered 71 PC-12s in 2004 and hopes to exceed that number this year. The next available delivery position is in late 2006. The company attributes the worldwide success of the PC-12 to the plane’s versatility combined with single-engine economy and recognized good workmanship.

Pilatus sells most PC-12s with a six-passenger executive interior, but all come equipped with a large aft cargo door. Operators can easily remove some or all of the passenger seats to make room for high priority cargo–or lifestyle accessories, like golf or skiing equipment, or even a motorcycle. Small and large companies fly the PC-12, as do the Canadian police and the Australian Flying Doctor service.

North America represents the largest market for the PC-12. In the U.S., as in Canada and Australia, the PC-12 can fly commercially under IFR conditions–still not the case in all European nations. In 2004 the U.S. market accounted for 48.7 percent of sales, Europe for 36.7 percent and Asia, Australia and Africa each for about 5 percent.

Turbo Porter Revived

The PC-12’s ancestor, the Porter PC-6 utility aircraft, has reemerged 45 years after its first flight. Pilatus has always offered refurbished Porters, but this year demand outstripped supply of used airplanes, so the manufacturer decided to build a batch of five new ones.

The PC-6 is an unpressurized single-engine propjet featuring a high wing and a fixed landing gear. It cruises at a modest 125 knots, but takes off and lands on less than 650 feet of unprepared runway. It often serves as a low-cost alternative to helicopters for civilian and military missions.

The aircraft’s excellent climb performance and large sliding doors on both sides of the fuselage also make it popular for sports parachute drops, as it can carry up to 10 parachuters, plus one pilot. A total of 530 Porters and Turbo Porters have been delivered to date.

The Pilatus PC-21, designed to train military pilots in high-performance flying and sophisticated weapons use at a lower cost, won European and U.S. certification early this year. An initial batch of eight aircraft are now making their way down the assembly line.

Pilatus developed the PC-21 in close collaboration with the air forces of Switzerland, South Africa, Australia and the UK. It hasn’t yet landed a firm order, but Pilatus continues negotiating with several air forces and plans a major marketing effort to start next year. Pilatus has presented a pre-series demonstrator to several air forces, including that of the United Arab Emirates.

Growing Maintenance Business

The large existing fleets of PC-12s, Porters and trainers provide Pilatus with a growing source of maintenance and refurbishing business. To help meet the demand, the manufacturer has acquired in recent years Transairco in Geneva and FFA in Altenrhein, Switzerland, and maintains sales and support subsidiaries in the U.S., Australia and Malaysia.

Transairco and FFA, as well as the main plant in Stans, also maintain aircraft not manufactured by Pilatus, including business jets built by Dassault and Bombardier. The company’s maintenance business increased by 20 percent between 2003 and 2004, and it expects growth to continue throughout 2005.

Despite record PC-12 sales in 2004 (71 aircraft), Pilatus has not managed to equal the revenues it drew in 2000. It attributes the dip to lower trainer sales and, above all, a weak dollar versus the Swiss franc. Nevertheless, Pilatus remains a profitable company, with an operating profit of SFr7 million ($5.6 million) for the latest financial year (about 40 percent up on the previous period).

Pilatus’ board of directors announced that an initial public offering may take place in 2006 or 2007, once PC-21 sales have started, but only under the appropriate financial market conditions.