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NEWS BUSINESS AND GENERAL AVIATION MANUFACTURERS & AIRFRAMES ANALYSIS: OPTIMISM RETURNING TO BUSINESS AIRCRAFT INDUSTRY AFTER MODEST 2017
ANALYSIS: Optimism returning to business aircraft industry after modest 2017
06 MARCH, 2018 SOURCE: FLIGHT INTERNATIONAL BY: KATE SARSFIELD LONDON
Although there were mixed fortunes for the business aviation market in 2017, a late surge in sales activity across the sector has triggered a sense of optimism not felt by the industry for some years.
In its latest annual industry review, released on 21 February, the General Aviation Manufacturers Association (GAMA) recorded total deliveries in 2017 of 1,065 fixed-wing turbine-powered business aircraft – both jets and turboprops – compared with 1,098 aircraft a year earlier. “While deliveries have declined year-on-year, I am encouraged by the industry’s performance in 2017,” says GAMA president Pete Bunce. “It started to turn a corner during the latter part of the year, helped by a number of factors, not least the shrinking used aircraft inventory, stability in many global markets, and a thriving US economy.”
The business jet segment was the strongest performer, recording 676 shipments compared with 667 in 2016, largely a result of the ramp-up in production of Honda Aircraft’s HA-420 HondaJet from 23 to 43, and the Cirrus Vision Jet, increasing from three to 22.
LIGHT JET BOOST
The pair’s strong performance boosted light jet output in 2017 to 284 aircraft – the highest total since 2010, GAMA data shows. Although this remains far below the sector’s 2008 peak of more than 650 deliveries, the annual output looks set to continue its upward trend for the foreseeable future, driven by the continued ramp-up of the HondaJet and Vision Jet and the introduction of the Pilatus PC-24. The Swiss airframer delivered the first superlight business jet in February and plans to ship a further 22 units in 2018 from its first order round of 84 units.
Fierce competition at the lower end of the business jet market, has, however, hit Embraer hard. The Brazilian airframer – whose product line is almost entirely positioned in the light and midsize categories – was the worst performer in the traditional business jet sector last year, recording a 7% fall in output, to 109 aircraft, GAMA data shows. Shipments in 2017 comprised 72 Phenom 100/300s, 36 Legacy 450/500/650s and a Lineage 1000E VIP airliner, compared with 73 Phenoms, 42 Legacy jets and a pair of 1000Es a year earlier.
Embraer's top performer in 2017 was the Phenom 100EV, a heavily revamped Phenom 100 introduced in April, with 18 deliveries. Embraer will be hoping the wave of upgrades set for introduction across most of its product line this year will help to rekindle sales. The first E-model variant of the Phenom 300 light jet is set to enter service with its unnamed South African launch customer imminently, and cabin enhancements for its Legacy 450 and 500 will arrive from the end of March.
Embraer’s closest rival, Cessna, delivered two additional Citations over the 12-month period, with output rising to 180 aircraft. Sales were largely a result of continued strong demand for its Latitude business jet, as shipments of the midsize type, which entered service in 2015, climbed by 30% to 54 units. The CJ4 appears to have fallen out of favour with buyers of light business jets: deliveries of the seven-seat type slid by more than 20% year-on-year, to 23 aircraft. The arrival in the second quarter of its long-awaited super-midsize Longitude should help to boost output this year, however.
Gulfstream recorded a single-unit fall in deliveries – to 120 for the year, GAMA data shows. The airframer delivered 90 large-cabin G450/G550s and G650s, and 30 midsize G150s and G280s in 2017, including the final G150 in June. This compares with 94 large-cabin and 27 midsize jets the year before.
Flat output at the Savannah, Georgia-based airframer is not expected to last. Gulfstream recorded an 80% year-on-year hike in new orders for its flagship G650 in the fourth quarter of 2017, and sees that momentum continuing into the new year. A further boost can also be expected in 2018 as deliveries begin of its ultra-wide-cabin G500 and G600, for which it has a strong, albeit undisclosed, backlog.
Bombardier is also bullish about its prospects in 2018, despite recording a fall in output last year. GAMA data shows the Canadian airframer shipped 140 aircraft in the 12 month period – 45 Global 6000/5000s, 81 Challenger 650/350s and 14 Learjet 70/75s. This compares with 163 shipments in 2016: 51 Globals, 88 Challengers and 24 Learjets.
Bombardier says it is encouraged by positive order activity across its range, and is preparing to deliver its ultra-long-range Global 7000 later this year.
Top-end turnaround
The growing demand for high-end business jets is a welcome boost for Dassault, whose Falcon product line – comprising the 8X, 7X, 900LX and 2000LXS – is positioned at top of the market. After a number of years of falling deliveries, output in 2017 stabilised at 49 units, slightly more than the 45 aircraft it forecast at the start of the year. Net orders climbed by 17 aircraft to 38 for the period, with the intake fairly evenly split across its line-up.
But Dassault suffered a major setback last year, when it was forced to axe its in-development Falcon 5X due to continued delays with the aircraft’s Safran Silvercrest engine. The original schedule called for entry into service of the ultra-wide business jet in 2017. This model has now been replaced by the longer-range, Pratt & Whitney Canada PW812D-powered 6X, which is scheduled to enter service in 2022.
The introduction of this new wave of wide-cabin jets will help to bolster the top end of the market, which has seen deliveries slide year-on-year since its 2013 peak of 336 units.
There were also mixed results in the VIP airliner sector. Airbus delivered no ACJ models, having delivered a single airliner in 2016, GAMA data shows. The airframer has an order backlog for 10 aircraft – an ACJ350-900, and nine ACJ319/320neos. The first example from the re-engined single-aisle family, an ACJ320neo, is scheduled for delivery in the fourth quarter to Swiss completion house AMAC Aerospace.
Boeing fared better in 2017, shipping seven green widebodies – four more than in 2016 – as well as three BBJ 777-300ERs, a trio of BBJ 787s and a BBJ 747-8. No 737-derived BBJ deliveries were recorded, however. As with rival Airbus, demand in the single-aisle segment has shifted to re-engined variants, with the first BBJ Max 8 due to be delivered to US completion centre Comlux America soon.
Aerospace analyst Rolland Vincent says the top-end of the market is in a “lull” period. “It was the last to feel the impact of the economic downturn and is still in recovery mode,” he says. Manufacturers are managing transitions to new models, he says, “with customers in a ‘wait-and-see’ mode until certification and entry into service occur.”
Turboprop decline
The turboprop sector recorded a 9.7% drop in deliveries to 389 aircraft in 2017, GAMA data shows, with the poorly-performing Beechcraft King Air family accounting for almost 50% of the slide. Vincent attributes the decline to falling international sales, which have traditionally accounted for around half of the orders. “A weakness in emerging market economies, low commodity prices and a strong US dollar have stifled King Air orders,” he says, although he believes that the “pendulum is now swinging back”.
The fragile international marketplace has also suppressed demand for single-engined utility turboprops. Quest recorded a five-unit slide in Kodiak output last year, to 31 aircraft, while Cessna saw deliveries of its Caravan family fall by 15 units to 69, GAMA data shows. As with the King Air, Vincent expects this sector to bounce back. “The utility aircraft segment has a stable, long-term growth outlook, with an upside linked to growth in courier and package delivery services in our increasingly online retail world,” he says.
Output for pressurised turboprop singles has remained steady, with the bulk of the demand for these types coming from the stable US owner-flyer, corporate and charter markets.
Vincent says the strength of this niche lies in their strong residual values, low operating costs, high reliability, and the brand loyalty of their customers.
Piper led the field, recording a 60% hike in deliveries of its flagship M600 to 35 units. Daher recorded 57 shipments of its TBM 930 and 910 – up from 54 the year before.
“Piper and Daher have been actively refreshing their product offerings, and customers respond very well to these investments,” says Vincent.
NEWS BUSINESS AND GENERAL AVIATION MANUFACTURERS & AIRFRAMES ANALYSIS: OPTIMISM RETURNING TO BUSINESS AIRCRAFT INDUSTRY AFTER MODEST 2017
ANALYSIS: Optimism returning to business aircraft industry after modest 2017
06 MARCH, 2018 SOURCE: FLIGHT INTERNATIONAL BY: KATE SARSFIELD LONDON
Although there were mixed fortunes for the business aviation market in 2017, a late surge in sales activity across the sector has triggered a sense of optimism not felt by the industry for some years.
In its latest annual industry review, released on 21 February, the General Aviation Manufacturers Association (GAMA) recorded total deliveries in 2017 of 1,065 fixed-wing turbine-powered business aircraft – both jets and turboprops – compared with 1,098 aircraft a year earlier. “While deliveries have declined year-on-year, I am encouraged by the industry’s performance in 2017,” says GAMA president Pete Bunce. “It started to turn a corner during the latter part of the year, helped by a number of factors, not least the shrinking used aircraft inventory, stability in many global markets, and a thriving US economy.”
The business jet segment was the strongest performer, recording 676 shipments compared with 667 in 2016, largely a result of the ramp-up in production of Honda Aircraft’s HA-420 HondaJet from 23 to 43, and the Cirrus Vision Jet, increasing from three to 22.
LIGHT JET BOOST
The pair’s strong performance boosted light jet output in 2017 to 284 aircraft – the highest total since 2010, GAMA data shows. Although this remains far below the sector’s 2008 peak of more than 650 deliveries, the annual output looks set to continue its upward trend for the foreseeable future, driven by the continued ramp-up of the HondaJet and Vision Jet and the introduction of the Pilatus PC-24. The Swiss airframer delivered the first superlight business jet in February and plans to ship a further 22 units in 2018 from its first order round of 84 units.
Fierce competition at the lower end of the business jet market, has, however, hit Embraer hard. The Brazilian airframer – whose product line is almost entirely positioned in the light and midsize categories – was the worst performer in the traditional business jet sector last year, recording a 7% fall in output, to 109 aircraft, GAMA data shows. Shipments in 2017 comprised 72 Phenom 100/300s, 36 Legacy 450/500/650s and a Lineage 1000E VIP airliner, compared with 73 Phenoms, 42 Legacy jets and a pair of 1000Es a year earlier.
Embraer's top performer in 2017 was the Phenom 100EV, a heavily revamped Phenom 100 introduced in April, with 18 deliveries. Embraer will be hoping the wave of upgrades set for introduction across most of its product line this year will help to rekindle sales. The first E-model variant of the Phenom 300 light jet is set to enter service with its unnamed South African launch customer imminently, and cabin enhancements for its Legacy 450 and 500 will arrive from the end of March.
Embraer’s closest rival, Cessna, delivered two additional Citations over the 12-month period, with output rising to 180 aircraft. Sales were largely a result of continued strong demand for its Latitude business jet, as shipments of the midsize type, which entered service in 2015, climbed by 30% to 54 units. The CJ4 appears to have fallen out of favour with buyers of light business jets: deliveries of the seven-seat type slid by more than 20% year-on-year, to 23 aircraft. The arrival in the second quarter of its long-awaited super-midsize Longitude should help to boost output this year, however.
Gulfstream recorded a single-unit fall in deliveries – to 120 for the year, GAMA data shows. The airframer delivered 90 large-cabin G450/G550s and G650s, and 30 midsize G150s and G280s in 2017, including the final G150 in June. This compares with 94 large-cabin and 27 midsize jets the year before.
Flat output at the Savannah, Georgia-based airframer is not expected to last. Gulfstream recorded an 80% year-on-year hike in new orders for its flagship G650 in the fourth quarter of 2017, and sees that momentum continuing into the new year. A further boost can also be expected in 2018 as deliveries begin of its ultra-wide-cabin G500 and G600, for which it has a strong, albeit undisclosed, backlog.
Bombardier is also bullish about its prospects in 2018, despite recording a fall in output last year. GAMA data shows the Canadian airframer shipped 140 aircraft in the 12 month period – 45 Global 6000/5000s, 81 Challenger 650/350s and 14 Learjet 70/75s. This compares with 163 shipments in 2016: 51 Globals, 88 Challengers and 24 Learjets.
Bombardier says it is encouraged by positive order activity across its range, and is preparing to deliver its ultra-long-range Global 7000 later this year.
Top-end turnaround
The growing demand for high-end business jets is a welcome boost for Dassault, whose Falcon product line – comprising the 8X, 7X, 900LX and 2000LXS – is positioned at top of the market. After a number of years of falling deliveries, output in 2017 stabilised at 49 units, slightly more than the 45 aircraft it forecast at the start of the year. Net orders climbed by 17 aircraft to 38 for the period, with the intake fairly evenly split across its line-up.
But Dassault suffered a major setback last year, when it was forced to axe its in-development Falcon 5X due to continued delays with the aircraft’s Safran Silvercrest engine. The original schedule called for entry into service of the ultra-wide business jet in 2017. This model has now been replaced by the longer-range, Pratt & Whitney Canada PW812D-powered 6X, which is scheduled to enter service in 2022.
The introduction of this new wave of wide-cabin jets will help to bolster the top end of the market, which has seen deliveries slide year-on-year since its 2013 peak of 336 units.
There were also mixed results in the VIP airliner sector. Airbus delivered no ACJ models, having delivered a single airliner in 2016, GAMA data shows. The airframer has an order backlog for 10 aircraft – an ACJ350-900, and nine ACJ319/320neos. The first example from the re-engined single-aisle family, an ACJ320neo, is scheduled for delivery in the fourth quarter to Swiss completion house AMAC Aerospace.
Boeing fared better in 2017, shipping seven green widebodies – four more than in 2016 – as well as three BBJ 777-300ERs, a trio of BBJ 787s and a BBJ 747-8. No 737-derived BBJ deliveries were recorded, however. As with rival Airbus, demand in the single-aisle segment has shifted to re-engined variants, with the first BBJ Max 8 due to be delivered to US completion centre Comlux America soon.
Aerospace analyst Rolland Vincent says the top-end of the market is in a “lull” period. “It was the last to feel the impact of the economic downturn and is still in recovery mode,” he says. Manufacturers are managing transitions to new models, he says, “with customers in a ‘wait-and-see’ mode until certification and entry into service occur.”
Turboprop decline
The turboprop sector recorded a 9.7% drop in deliveries to 389 aircraft in 2017, GAMA data shows, with the poorly-performing Beechcraft King Air family accounting for almost 50% of the slide. Vincent attributes the decline to falling international sales, which have traditionally accounted for around half of the orders. “A weakness in emerging market economies, low commodity prices and a strong US dollar have stifled King Air orders,” he says, although he believes that the “pendulum is now swinging back”.
The fragile international marketplace has also suppressed demand for single-engined utility turboprops. Quest recorded a five-unit slide in Kodiak output last year, to 31 aircraft, while Cessna saw deliveries of its Caravan family fall by 15 units to 69, GAMA data shows. As with the King Air, Vincent expects this sector to bounce back. “The utility aircraft segment has a stable, long-term growth outlook, with an upside linked to growth in courier and package delivery services in our increasingly online retail world,” he says.
Output for pressurised turboprop singles has remained steady, with the bulk of the demand for these types coming from the stable US owner-flyer, corporate and charter markets.
Vincent says the strength of this niche lies in their strong residual values, low operating costs, high reliability, and the brand loyalty of their customers.
Piper led the field, recording a 60% hike in deliveries of its flagship M600 to 35 units. Daher recorded 57 shipments of its TBM 930 and 910 – up from 54 the year before.
“Piper and Daher have been actively refreshing their product offerings, and customers respond very well to these investments,” says Vincent.