Citing ongoing problems with Safran's Silvercrest engine, Textron Aviation has suspended work on its large-cabin Cessna Citation Hemisphere business jet. Textron chairman and CEO Scott Donnelly, who made the announcement during an investor conference call this morning, said the company is "waiting to see how the engine plays out. And then, based on that, we'll make our decisions and move forward knowing what the performance of the engine is."
Some aviation analysts think that Safran's ongoing engine problems might give Textron an off-ramp from, or at least further delay entry into, what was promising to be an already crowded new-model, large-cabin market. “Sounds like [Textron is] stepping away from Hemisphere due to engine delays and due to likely competition from Gulfstream,” said Jon Raviv, senior analyst and vice president for aerospace and defense at Citi Research.
“Hemisphere always seemed a bit of a leap for Cessna, in terms of resources and market position, particularly given their relatively weak sales base since the 2009 downturn,” added Richard Aboulafia, vice president of analysis at the Teal Group. “It's particularly hard to make the jump to the top half of the market, where only Bombardier, Gulfstream, and Dassault play.
“The Silvercrest's problems might serve as a rationale to kill the program. Alternatively, Cessna could simply go with Pratt & Whitney Canada's PW800, as Dassault did. Looking at the spec change between the Falcon 5X and 6X, there wouldn't be much of an impact to the Hemisphere's performance goals,” he said.
Rolland Vincent, president of Rolland Vincent Associates and managing director of JetNet iQ, believes Textron is likely to defer the program rather than stay on the pre-announced program schedule. “They have still to certify and then sell bunches of Longitudes, which over time will provide them a natural step-up customer base for the redefined Hemisphere program,” Vincent said. “It's some more good news for the three large-cabin incumbents—Bombardier, Dassault, and Gulfstream—and any development programs they have under way or consideration; a fourth competitor was not going to help pricing discipline and margins in this space, that’s for sure.”
He said Textron's decision all but buries the Silvercrest program: “This is a major body blow to Safran, but not unexpected.” Vincent added that if Textron eventually proceeds with a Hemisphere program re-engined with a Pratt & Whitney Canada (P&WC) powerplant it will “complete a coup d’etat for P&WC, who have really stepped up their game and shifted up-market, much as Textron has been striving to do.”
Analyst Brian Foley thinks it still makes sense for Textron Aviation to pursue a large-cabin program, even if that means delaying it so it can be reworked with a new engine. “Whatever the outcome, it still behooves Cessna to eventually offer a new, top-of-the-line flagship product to allow loyal customers to trade up to and remain in the family,” he said.
As late as December 2017, Textron Aviation had reaffirmed its commitment to the troubled Silvercrest program, even though the engine's only other commercial customer, Dassault Aviation, then had canceled its Falcon 5X program due to continuing development problems with the engine. The problems eventually led Dassault to launch the Falcon 6X program in February and turn to P&WC’s PW800-series engine for that aircraft. It also prompted Safran to take a $720 million write-down against the Silvercrest program in 2016.
Dassault Aviation CEO Eric Trappier made no attempt to contain his frustration with Safran over the Silvercrest's delays at NBAA 2017, including fresh problems revealed days before the show opened with regard to acceleration of the high-pressure compressor at high altitudes. “We believed we were at the end of the program,” he told AIN. “The final version of the engine was supposed to be delivered at the end of this year or early next year.”
In unveiling the 6X in February, he said, “I had no choice to stop the 5X program and find the best possible engine.” Last year, a senior Safran executive told AIN that the company had a good understanding of the compressor problem and a range of possible solutions but had no fixed timeline for a solution.
“We’re committed to being an industry leader and will not back off on the performance specifications we want for the Citation Hemisphere," a Textron Aviation spokesperson told AIN. "We remain in touch with Safran on the 18- to 24-month delay of the Silvercrest engine.”
A spokesman from Safran Aircraft Engines said the company "is fully committed to continue and complete the development of the Silvercrest engine, all the way to certification, with our primary objective being to deliver to Cessna an engine in compliance with the specifications of its new Hemisphere aircraft. As we said previously, we are working on the HP axial compressor optimization and improvements, and all the progress that has been made are shared regularly with Cessna.”