GAMA: Turbine Aircraft Deliveries Slipped in 2012

 - March 2, 2013, 3:10 AM

While the business aviation industry greets each morsel of positive economic news with cautious optimism, continuing financial indecision made 2012 another depressed year for turbine aircraft deliveries, according to the General Aviation Manufacturers Association (GAMA), which released its year-end delivery totals last month. Last year general aviation reached a milestone of sorts, according to GAMA chairman Brad Mottier. For the first time, he noted, shipments to North American buyers in all three airplane segments–jets, turboprops and pistons–dipped to 50 percent. “This signifies the more global nature of GA sales as reflected in our member companies, which are expanding their operations globally to better manage and service their products,” he told the audience.

While 2012 saw a modest increase in overall aircraft shipments, the lower-end non-pressurized utility turboprop segment accounted for all of the gains, as overall billings decreased by nearly one percent, from $19 billion to $18.9 billion. The business jet and pressurized turboprop segments saw a year-over-year decrease of approximately 4 percent. “While the 2012 shipment and billing data were mixed, the numbers don’t reflect the amount of development work in progress in general aviation,” said Mottier, GE Aviation’s vice president and general manager for business and general aviation. “The general aviation segment is poised for resurgence in the next few years as these new technologies achieve certification and enter the market.”

Business jet manufacturers handed over 672 aircraft last year, 24 fewer than the previous year and the lowest tally since 2004, when the airframers delivered 591 aircraft. Those delivery totals were buoyed by a fourth-quarter push during which more than a third of the year’s bizjets were handed over. The decrease in deliveries was fueled by the shutdown of Hawker Beechcraft’s business jet lines. The manufacturer delivered 20 fewer jets last year than it did the previous year as it looked to clear its inventory.

Among the major business jet builders, only Dassault saw a year-over-year increase in the number of aircraft delivered, handing over six more Falcon 7Xs and two more 2000LXs in 2012 than it did in 2011 to offset a decrease in 900LXs. Embraer matched its previous year’s delivery total, thanks to a fourth-quarter flurry that saw its customers take delivery of 53 jets, more than half the Brazilian OEM’s 2012 output. While its light Phenom 100 saw a sizable decline in deliveries, the larger Phenom 300 and Legacy 650 made up the difference.

In North America, the remaining dedicated business aircraft manufacturers experienced minor erosion. Cessna handed over two fewer jets last year than it did in 2011 for a little more than 1-percent change, the largest swing being with the Citation Mustang. The airframer delivered five fewer of the VLJs year-over year.

Bombardier was off its 2011 pace by three jets. While the Canadian manufacturer delivered nine fewer Challenger 605s in 2012 than it did the previous year, it made up for the deficit by delivering 11 more Challenger 300s than it did the previous year. It delivered a total of 179 aircraft, more than one-third of them in the fourth quarter.

In Savannah, Gulfstream began deliveries of two new models in last year’s fourth quarter: the super-midsize G280 and the ultra-long-range, large-cabin G650. While the company did not meet its early predictions for the number of G650s it would deliver in 2012, the boost was enough to increase its year-over-year large-cabin delivery totals by five. As the company wound down G200 deliveries in favor of the G280, its smaller-cabin offerings decreased from 21 in 2011 to 11 in 2012, with more than half of those coming in the final quarter of the year. Last year to align itself with the other bizjet manufacturers, the General Dynamics subsidiary changed its reporting to include only completed aircraft deliveries, thus resulting in a change to its previously listed 2011 final delivery totals.

GAMA is now including Boeing and Airbus twin-aisle 747-8 and ACJ330 deliveries in its standard reporting rather than noting them in a footnote. However the association chose not to include them in its billings calculations because the disproportionate cost of these bizliners could skew the entire general aviation industry’s billing totals. For example, the eight private 747-8s that Boeing delivered in 2012–valued at nearly $2 billion alone–would account for more than 10 percent of the entire industry billings for the year. Those eight aircraft, however, paved the way for a 50-percent increase over Boeing’s delivery tally the previous year, while Airbus handed over one fewer private jet last year than it did in 2011. Embraer delivered five of its E190-derived Lineage 1000s and E-Jet shuttles in 2012, two more than it did the previous year.

Turboprop Deliveries

Last year’s better-than-10-percent increase in turboprop deliveries (580 compared with526 in 2011) can be attributed to GAMA’s recent inclusion of agricultural aircraft manufacturers such as Air Tractor and Thrush, which have seen an upsurge in their business worldwide. When those and other non-pressurized models are filtered out, the picture changes to a 6.3-percent decrease in deliveries year-over-year, with none of the manufacturers exceeding their 2011 delivery totals. Hawker Beechcraft–which at press time was moving to emerge from bankruptcy protection with its turboprop business intact–delivered 85 King Airs last year, down slightly from the 92 it handed over in 2011. Italian manufacturer Piaggio saw a drastic downturn in Avanti II deliveries last year, handing over five of the turboprop twins compared with 14 in 2011. “It was a year that we saw a number of deals not come together in terms of timing,” said Piaggio America president John Bingham, “but already in 2013 we have seen a much enhanced interest in our aircraft and a much higher level of prospects.” He added that the company expects to complete its new factory in Northern Italy later this year.

The number of Daher-Socata TBM850 deliveries remained static from year to year, as did deliveries of the Piper Meridian. Pilatus was off by one aircraft from the 63 PC-12s delivered in 2011. Newly added to the list of single-engine turboprop manufacturers is Extra Aircraft. The German company delivered the first two of its Rolls-Royce-powered six-seaters last year, several years after the high-wing aircraft received EASA certification.

When asked about his predictions for the year ahead, GAMA president and CEO Pete Bunce noted some hurdles such as the still-lurking threat of sequestration, which could hobble some crucial U.S. government agencies, and the financial uncertainty still gripping the globe. “When the economy finally does recover in North America and we see recovery in Europe, this entire industry is going to take off,” said GAMA president and CEO Pete Bunce. “That’s why you see all this investment. These are smart men and women running these companies, and we wouldn’t be spending the billions of dollars in investment unless we saw a bright future ahead.”

GAMA Not Just Airplanes Anymore

Over the past year, GAMA has expanded its membership beyond the fixed-wing market, with the addition of manufacturers such as Bell, Eurocopter, Robinson and Enstrom. “This is the first year we are reporting on rotorcraft data,” said GAMA president and CEO Pete Bunce. “We are proud to be able to start representing this important segment of general aviation.”

Based on the yearly reporting from those members, the association said that the helicopter business is suffering from none of the malaise currently affecting its fixed-wing brethren. “If you look at overall shipments in rotorcraft, it’s a good business to be in right now,” said Bunce at the association’s annual state of the industry press conference last month. From that abbreviated list of OEMs the association correlated an overall increase of 21 percent in billings between 2011 and 2012. The association describes the piston helicopter segment as “a bright spot in general aviation at this time.” That sector experienced a 22-percent increase in deliveries year-over-year, while single-engine turbine helicopters performed even better, posting a 23-percent increase. Twin-engine turbine-powered rotorcraft experienced a 16-percent increase. For 2012, Bell Helicopter reported 188 deliveries across its entire range, with billings of $1.7 billion, while Eurocopter handed over 334 rotorcraft worth an approximate $1.46 billion. Robinson Helicopter, delivered 517 units including 191 of its turbine-powered R66, billed at nearly $200 million overall, while Enstrom tacked on an additional five.

Over the next year, GAMA hopes to add Sikorsky, AgustaWestland and MD Helicopters to its membership roster to help complete its rotary-wing roster. The association is also contemplating adding Russian manufacturers, which account for a sizable share of the Central European helicopter market.