BizAv sluggish until 2016: Rockwell Collins’ CEO
Jan. 22, 2014, Cedar Rapids, Ia. - The slump in business-jet sales since the 2008 global recession probably will last into 2016 as corporate buyers wait for their businesses to rebound, Rockwell Collins Inc. Chief Executive Officer Kelly Ortberg said.
Jet manufacturers and suppliers like Rockwell Collins are
seeing tepid sales of smaller private aircraft in part because
the economic recovery has been driven by cost cuts, not sales
growth, Ortberg said in a telephone interview today.
Business-jet shipments fell 2.1 percent for the first nine
months of 2013 from a year earlier, according to data compiled
by the General Aviation Manufacturers Association trade group.
Ortberg said smaller companies, whose purchases typically drive
that market segment, are refurbishing older planes and won’t
begin placing new orders until they see robust revenue gains.
“I don’t think it can go down any further,” said Ortberg,
whose Cedar Rapids, Iowa-based company makes avionics and cabin
equipment for business-jet manufacturers including Textron Inc.,
Bombardier Inc. and Dassault Aviation SA. “We’re at a low level
of sustained production. I think we’ll stay at that low level.”
Rockwell Collins stands to gain sales as jet owners update
information technology and entertainment systems on older
aircraft, Ortberg said. He said he also expects to see sales
rebound after the debut of new models such as Bombardier’s
Learjet 85, which missed a target to enter service in 2013.
Rockwell Collins rose 0.9 percent to $78.26 at 11:54 a.m.
in New York after reporting a first-quarter profit of 96 cents a
share, beating analysts’ average estimate of 94 cents. Annual
profit will be $4.35 to $4.55 a share as U.S. government sales
rise, topping a forecast of $4.30 to $4.50, the company said.