Pistons power global GA deliveries

KATE SARSFIELD / LONDON

Turboprop and business jet shipments nosedive, but industry remains optimistic and GAMA signals upturn in all sectors

Global deliveries of general aviation aircraft held up last year, according to figures released by the US General Aviation Manufacturers Association (GAMA). Manufacturers are optimistic that the industry is turning the corner on what is regarded as one of the most challenging market cycles in history.

The strong growth in the piston-engine aircraft market offset a decline in shipments of business turboprops and jets, keeping total industry shipments virtually unchanged from the previous year at 2,686 units. Total industry billings, however, were the worst for five years, says GAMA, falling by 15.5% to $9.99 billion. "Last year's figures are a mirror opposite of 2001," GAMA says, when a robust business-jet market led to increased industry billing, but the weak piston-aircraft market led to a decline in industry shipments. "The lesson appears to be that business jets drive billings and piston aircraft drive shipments," it says.

The impressive 9.5% growth in piston deliveries to 1,896 units can be attributed in part to the increase in the student pilot and owner/flyer populations, lured by the availability of affordable, user-friendly, new-generation aircraft.

GAMA's delivery numbers include, for the first time, Australia's Gippsland Aeronautics and Austria's thriving light-aircraft manufacturer Diamond Aircraft, which recorded deliveries of 19 and 228 aircraft, respectively. The fervent production ramps-up across the manufacturing bases led to strong fourth-quarter shipments, which GAMA suggests is an early indicator of a broader turnaround in all segments of general aviation.

This optimism will be a welcome boost to business jet and turboprop manufacturers. While the latter saw shipments fall by 2.9% to 272 aircraft, compared with the previous year, business-jet builders bore the brunt of last year's downturn. Deliveries plummeted by 23.4% to 518 units compared with 676 units in 2002. Shipments of US-manufactured jets nose-dived by 26.7% to 384 units. That said, manufacturers predict stable deliveries in 2004 and suggest signs of recovery are evident in business aviation.

Cessna parent Textron says it is witnessing new order activity with Citation production at Cessna this year already 70% sold.

Last year, however, Citation business-jet deliveries fell to 197 units and are expected to drop this year to 165-170 aircraft. The number of planned Citation deliveries was cut early in 2003 after leading fractional-ownership operator NetJets cancelled significant orders. Despite this, 16% of Citations shipped last year went to fractionals, compared with 20% in 2002. Textron says fractionals will account for 15-20% of deliveries this year.

Gulfstream delivered 74 aircraft last year, down from 94 in 2002, but parent General Dynamics says consumer confidence is returning, with 34 new orders taken in the fourth quarter of last year alone - 26 for large business jets. Excluding fractional activity, orders last year totalled 78 aircraft, equal to 2002 (57 large and 21 mid-size business jets) although cancellations doubled to 12 during the same period, for a net total of 66 firm orders. Gulfstream has also sold 70% of its planned 2004 production, adding that no completed G400/G450 or G500/G550 large business jets are available until 2005.

The company was concerned the launch of the G450 would cannibalise sales of the G400, but Gulfstream now holds deposits or letters of intent for the final four G400s. The first five G450s are set to be delivered in the fourth quarter.

Bombardier's temporary manufacturing shutdown early last year hit deliveries and billings hard. The Canadian manufacturer shipped only 70 aircraft, valued at just under $1.58 billion, compared with 108 aircraft valued at around $2.1 billion in 2002.

France's Dassault saw shipments fall last year by 17, to 49 aircraft, including 16 deliveries of the Falcon 2000EX and four of its 900EX EASy. It plans to deliver around the same number this year.

Raytheon Aircraft missed its 2003 delivery forecast of 191 business aircraft but still ended the year marginally up on 2002's total of 174 business aircraft. The manufacturer plans to deliver 211 business aircraft this year, including the first two Hawker Horizon super mid-size business jets. Beechjet Premier I deliveries are also set to increase this year from 29 to 40 aircraft, as are shipments of the revamped Hawker 400XP. Raytheon also delivered 82 piston-engined aircraft last year and plans to increase production of the Bonanza singles and Baron twins to 98 aircraft this year.

The used-aircraft inventory, widely regarded as a gauge of the strength of the business-jet fleet, has shrunk by 3% from a high early last year of 18% . Although the current level remains much larger than the 12% historical average, GAMA chairman Clay Jones suggests that many of the older types are not viewed by manufacturers as competition for new models. The cost of updating some types to meet current operating regulations, such as reduced vertical separation minima, has become prohibitive for operators and many are unlikely to return to the active fleet, he says.

There are several other encouraging signs for the industry. GAMA says "bonus depreciation" provision, which allows companies that buy aircraft before 11 September 2004 to write off half the value of an aircraft in the first year, is stimulating orders. The priority now, the association says, is to extend the provision beyond the September deadline.

Flight activity in 2003 was up by 1.2% among business-jet operations at large US airports, according to the US Federal Aviation Administration, while worldwide corporate operator numbers rose by 4.3% to 14,555, utilising a total fleet of 23,121 aircraft. Added to this, US fractional-ownership programmes saw shareowners increase by 6.7% last year from 4,232 to 4,515, while the fractional-aircraft fleet increased by just over 6% to 823 aircraft.

Airframers within this highly innovative sector will continue to refresh their product lines and adapt to meet changing customer expectations. In the piston market there are not just new aircraft but new companies building them with new materials and dramatically improved avionics, says Jones.

For the business-jet market the spectrum of aircraft will be stretched as the new microjets enter service in 2006. The revolution in customised travel solutions, such as fractional ownership and block charter jet cards, will continue as industry players strive to broaden their market share by lowering the cost of entry into business aviation.

Source: Flight International