Commercial aircraft business keeping Wichita afloat
Dec. 9, 2011, Wichita, Kan. - In the short term, the air transport industry is saving the day in Wichita, leaders of Wichita’s five aircraft suppliers said during a panel discussion during the Wichita Aero Club’s third annual summit held today.
December 9, 2011 By The Wichita Eagle
Unprecedented production rates of Boeing and Airbus airliners is good news for Spirit AeroSystems and its suppliers. But recovery in the general aviation industry will take some time.
Demand for business jets will recover with the economic recovery and when stability in the stock markets and government spending return, they said.
“What happens in the world does affect us,” said Ralph Acs, Bombardier Learjet vice president and general manager.
Acs expects business jet demand next year to be much like 2011, with growth expected in 2013.
“We’ve got to come out of this eventually,” Acs said. Seventy percent of Bombardier’s business jet sales are to international buyers.
Besides Acs, panelists also included John O’Leary, Airbus North America Engineering vice president of engineering; Bill Boisture, Hawker Beechcraft chairman and CEO; Jeff Turner, Spirit AeroSystems president and CEO; and Mark Paolucci, Cessna Aircraft senior vice president of business jets.
Fred George, senior editor of Business & Commercial Aviation magazine, moderated the discussion. The summit, held at the Wichita Airport Hilton, drew about 350 attendees.
Wichita is like Dicken’s famous book, “A Tale of Two Cities,” George said. While demand is down for business aircraft, it’s strong for commercial airliners.
Spirit builds parts of every Boeing airliner in Wichita. Turner said rising production rates will put pressure on raw materials and finished parts.
During the downturn, suppliers have been worried about making investments in their businesses, he said. Some took a wait and see attitude. Others, however, took a risk and made investments. Now, he said, it appears they will be rewarded for it.
Still, while demand for airliners is high, there are price constraints on how much manufacturers can charge for the planes. The price passengers pay for airline tickets affect the price of a jet, Turner said.
“You all are the problem,” he joked. “You won’t pay more for airline tickets.”
As a result, suppliers with the right pricing “are going to have a field day,” Turner said.
For the business jet market, a stock market that is “bouncing around every day” means buyer confidence is down, said Cessna’s Paolucci. On the other hand, “South America and Brazil didn’t even know there was a recession going on,” he said.
Despite low demand, Hawker Beechcraft is modestly raising production rates of its three best-selling models, said Boisture, its CEO. Business aircraft pricing must also stabilize to signal the banks to loan money on new aircraft, Boisture said.
One problem Wichita must face is an aging workforce that will retire in the next few years. Wichita must guard against losing the advantage of a highly trained and skilled work force.
“We’ve got to replenish the network,” Turner said.
Acs said he would like to do more at Bombardier’s Wichita plant, but he can’t find the right people.
“And it’s not just people,” he said. “We have to find the people who have been through the battles.”