Gulfstream is considering further cutting production of midsize business jets, which continue to suffer from weak demand while demand for larger jets show signs of recovery.
In January it cut G150/G200 production from 69 aircraft in 2008 to 30 aircraft in 2009 and in March this was trimmed to only 24 aircraft. Chief executive Joe Lombardo says G150 and G200 sales remain "very slow" and the manufacturer is now planning a meeting with partner Israel Aerospace Industries to discuss a further cut.
IAI produces all G150s and G200s as green aircraft before their completion at Gulfstream facilities in the USA. Gulfstream parent General Dynamics' second quarter earnings report says the midsize market "continues to struggle with large inventories and considerable pricing pressure", and Lombardo says a further production cut is possible to match demand, but any new rate would be decided jointly with IAI.
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But, he adds that while there is still "pressure" on the G150 and G200 "we're seeing a little better response from the customer base on large aircraft". He says all 73 large-cabin delivery slots for 2009 are now sold and there are no plans to further reduce its large-aircraft production rate.
In March Gulfstream cut large-jet production, which had reached 87 aircraft in 2008 and was due to increase to 94 in 2009, to 73 aircraft. Deliveries are again expected to be "in the low 70s" in 2010, according to General Dynamics.
While second quarter revenues were down 16% year-over-year, Gulfstream had its best quarter in terms of new sales in one year. The critical book-to-build ratio also returned to above 1:1.
Despite slashing production, Gulfstream has not slowed down development efforts for the new G250 and G650. Lombardo says both aircraft will make their first flights this year.
Source: Flight International
