Cessna marches into NBAA 2005 brimming with confidence and riding a bulging $6 billion orderbook. "The indications are that we've recovered to a pre-9/11 type backlog," says company chairman, president and chief executive Jack Pelton, who adds "it has recovered quicker than we thought”.
Just as importantly, Pelton says the company's current health and the solid backlog puts Cessna in a good position for sustained growth through 2006-7. "We see the industry and the economy continuing to be strong, and we see continued economic growth - though it may be slightly slower." Production rates for jets and pistons are being raised as a result. Led largely by accelerated assembly of the latest Citation Sovereign, CJ3 and XLS aircraft, jet production is scheduled to rise to 290 aircraft in 2006 against 245 this year.
But Cessna's robust position is no accident, says Pelton. "During the tougher economic times we made bold investments in our service centers and the development of five new jets - the CJ3, XLS and Sovereign in 2004, and the CJ1+ and CJ2+ in 2005, as well as paving the way for the Mustang in 2006." Cost-saving lean production initiatives based on the Toyota manufacturing system helped streamline Cessna's operations and free assembly space without the need for further expensive buildings.
At the same time, Cessna stayed clear of the temptation to bring in potential risk-sharing partners on any of its development projects.
Profit
"This was mostly so we could keep control over our costs after we're done with development. So we're fortunately not dependent on that strategy." Earnings and revenues have therefore increased, and "we're projecting to end up the year with around a 13% profit margin”.
The development focus for the coming year is the Mustang, which all in the industry but Cessna refer to as a very light jet (VLJ). "Two are in flight test, and the third joins in January, when we start the completion of the certification process," says Pelton. "That's also when we begin to ramp up production. Although it's clearly going to be more volume than any other Citation family member, we're not anticipating thousands per year. But we will see between 100 and 150, which is the highest in volume terms we'll have done compared to anything before it."
Previously, Cessna's highest volume production has been between 60 and 70 a year for the XLS. However, Pelton is not complacent about the production task ahead. "It doesn't take many hiccups before you get behind the power curve."
Strategy
But where next for Cessna's development strategy after the Mustang?
Announcements are expected to be made about a new derivative program at NBAA, and although Pelton is saying nothing until the show, the betting is on an upgraded model such as the Encore with the interior and cockpit developed for the CJ+ series. Further off, Pelton acknowledges that Cessna continues to study a larger Citation X. "One of the dilemmas we have is that if you want to move up from a Citation X or Sovereign we don't have anything to offer. We want to make sure we're a player in all categories."
Cessna's name is frequently associated with supersonic business jet studies, but Pelton says the reality is a lot further off. Although acknowledging some involvement with Lockheed Martin (which is working under contract to Michael Paulson's SAI Quiet Supersonic Transport
project) on marketing and systems consultancy work, Pelton says: "We don't see a huge market, and not one that would justify the sort of investment a supersonic business jet would require."
As the maker of the Citation X, which, with the retirement of the Anglo-French Concorde, is now the world's fastest commercial aircraft, Cessna is skeptical about the risks involved in going for more speed.
"We still feel they have some very large regulatory impediments into the market. In the USA it is illegal to fly supersonically overland, and I don't see any of our political figures taking on that crusade. That puts a dampener on what the total market could be."
Next year could also see the unveiling of a next generation Cessna piston single to succeed the iconic high-wing 172/182 and 206 models of today. "When we went back into single piston production in 1996 we committed in the long term to do something new in that end of the market. We've been looking at what is the right family of products, and when the timing is right for us to do that."
As it is, production of the singles will come to around 850 in 2005, "and we will grow that again in 2006”, says Pelton, who adds that the next generation, when launched, will "obsolete the traditional models”.
Production of the turboprop-powered 208 Caravan, which reached 70 aircraft in 2005, is expected to steady at between 60 and 70 a year over the balance of the decade.
Source: Flight International
