Contributor - Accidents and Regulations

Contributor - Accidents and Regulations

Gordon Gilbert

Manufacturers delivered 518 new business jets last year, some 23 percent fewer than the 676 shipped in 2002, according to the annual year-end report released last month by the General Aviation Manufacturers Association. Last year’s figure is the lowest level since 1998, when 520 business jets were delivered. Nonetheless, the number of shipments last year by all the manufacturers was close to the overall average of 523 business jets delivered over the 10-year period from 1994 to 2003. 
An even better long-term picture emerges for business turboprops. The 210 business turboprops delivered last year represented a nearly 11-percent increase over 2002, and exceeded the annual average of 197 turboprops delivered from 1994 to 2003. 
On an individual company basis, deliveries last year of several manufacturers were clearly better than in many prior years. Therefore, when looking at the statistics for the last 10 years, deliveries of both jets and turboprops last year don’t look too bad. 
What’s more, in their annual earnings reports released earlier this year, several manufacturers expressed confidence that they are seeing signs of a steady economic recovery (see accompanying charts). 
Citation Still Beats the Competition Cessna delivered 197 Citations last year versus 305 in 2002, reducing the Wichita manufacturer’s 2003 revenues and profits. The company plans to deliver 165 to 170 Citations this year but said, “We are about 70-percent sold out for our 2004 delivery target.” Even with a lower production rate planned this year, Cessna continues to capture the majority of the markets in which Citations compete and has delivered 72 percent of business jets shipped by all the manufacturers from 1994 to 2003. 
Despite last year’s cancellation of a large Citation CJ3 order by NetJets, which instead ordered 50 Hawker 400XPs (formerly Beechjet 400As) and eight 800XPs from Raytheon Aircraft, fractionals–primarily NetJets and CitationShares– remain an important buyer for Citations. Cessna expects fractionals to take as much as 20 percent of total units shipped this year. In the preceding three years, fractional operators accounted for 16-, 20- and 13 percent, respectively, of total deliveries. Generally speaking, Cessna executives said, the used aircraft market “appears to have stabilized and activity levels for new jet inquiries are improving.”
Gulfstream Logs Record 4Q Orders In the fourth quarter last year, Gulfstream Aerospace received orders for 34 aircraft. Although this was the largest number the company has ever garnered in a three-month span, Gulfstream last year received total orders for 66 aircraft versus 72 in 2002. Gulfstream projects delivering 75 aircraft this year–one more than last year–compared with 85 in 2002 and 101 in 2001.
“We entered 2004 with an improving economic outlook for business aviation,” company executives said, claiming that nearly 70 percent of this year’s production has already been sold and adding that new customers can’t get a Gulfstream delivered until next year. 
However, earlier this year Gulfstream had not sold any positions for the new G450, but said “we are deep in negotiations” on the first five aircraft, scheduled for delivery in the fourth quarter, adding, “We are not going to have any trouble selling them.” At press time, Gulfstream’s parent company, General Dynamics, declined to comment on G450 sales. (The G450 is an upgraded G400 with the PlaneView cockpit.) Gulfstream reported 12 cancellations last year, twice as many as in 2002. To help keep contracts firm, the company said “cash terms are stronger” and Gulfstream has taken steps to “tighten contract” requirements. “Frankly, we are much less accommodating,” a spokesman noted.
Pilatus Had Strong 2003 Despite turbulent times for many business aircraft manufacturers, Pilatus Aircraft reported strong demand for its PC-12 turboprop single. The Swiss-based company delivered 61 PC-12s worldwide last year, a 35-percent increase over the 45 shipped in 2002, reported Tom Aniello, v-p and chief marketing officer for Pilatus Business Aircraft in Broomfield, Colo. 
“Our network of Pilatus sales centers experienced very strong activity in the corporate, owner-flown and concept segments during the second half of the year,” Aniello said. “In addition, we’re beginning to see the government and special-mission market come alive in response to the introduction last summer of the PC-12 Spectre. The U.S., Mexico, Europe, South Africa, and Australia were excellent markets for Pilatus in 2003.” 
Raytheon Aircraft Deliveries Increase Raytheon Aircraft last year delivered 177 business jets and turboprops, compared with 165 in 2002 and 217 in 2001, excluding special-mission aircraft. Sales volume and operating income were particularly strong in the fourth quarter, helping to increase year-over-year performance. 
This year Raytheon Aircraft is projecting deliveries of 209 business aircraft, two of which will be the first deliveries in the fourth quarter of the long-delayed Hawker Horizon. Last year Raytheon Aircraft received bookings for 211 aircraft, including the $360 million December sale of 58 Hawkers to NetJets for delivery through 2009. Raytheon said it took in bookings for 259 aircraft in 2002. The company expects year-over-year sales to be up 6- to 8 percent, driven by higher deliveries of Hawker 400XPs, Premier Is and King Airs. “Despite the higher sales, we are planning on break-even to a slight profit for the year in terms of operating earnings at Raytheon.” 
Overall, last year’s delivery statistics may have been disappointing compared with 2002, but they look good when compared with the average number of deliveries since 1994. Consider that 728 business turbine airplanes were shipped last year and the annual average over the last 10 years was 719.

2003 turbine shipments topped 10-year average

Manufacturers delivered 518 new business jets last year, some 23 percent fewer than the 676 shipped in 2002, according to the annual year-end report releas

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