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General aviation deliveries down, billings up in 2011

Feb. 23, 2012, Wichita, Kan. - General aviation deliveries worldwide fell slightly during 2011, the fourth year of a decline, although billings showed a slight uptick.


February 23, 2012
By The Wichita Eagle

Signs pointed that general aviation would begin a recovery last year.

“Unfortunately, you will see that a resurgence did not take place for the industry as a whole,” General Aviation Manufacturers Association chairwoman Caroline Daniels said during a webcast GAMA meeting in Washington today.

“However, 2011did furnish signs of a sustained recovery and some reason for optimism.”

Declines were in the single digits.

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“This is an indication that the trough in the industry cycle has been established,” Daniels said. Some manufacturers showed flat or improved performance last year over 2010.

“We don’t think we can go anywhere but up,” said Pete Bunce, GAMA president and CEO. “But how great the slope is depends on economic conditions.”

A majority of the market fundamentals for the industry are moving in the right direction. Unemployment levels are declining, corporate profits are up, the used market and flight activity have improved and emerging markets are driving new sales, GAMA officials say.

But there is a lot of uncertainty in the European and the global economy, Bunce said.

“Latent demand in the market exists and an ease in the credit markets could help boost our industry into positive growth once again,” Daniels said.

GAMA released year-end general aviation shipment and billing numbers today during a “state-of-the-industry” event in Washington.

Shipments for 2011 totaled 1,865 planes, down 3.5 percent from 1,932 planes the year before. Billings totaled $19.1 billion, up from $19.0 billion in 2010.

The biggest drop came in business jet deliveries last year. Planemakers delivered 681 business jets in 2011, down 6.3 percent from 727 jets in 2010.

Meanwhile, they delivered 860 piston-powered airplanes, compared to 873 in 2010, and 324 turboprops, down 2 percent from 332 the year before.

The results don’t include Hawker Beechcraft’s fourth-quarter results. The company will release fourth-quarter data when it releases its financial results in March.

Wichita manufacturers Cessna Aircraft and Bombardier Learjet saw deliveries increase in 2011, although Hawker Beechcraft general aviation deliveries declined in the first nine months.

Cessna Aircraft shipped 689 planes during 2011, compared to 534 the year before. Its billings totaled $1.76 billion, up from $1.54 billion in 2010.

It delivered 168 Skycatchers, a light sport aircraft, compared to 22 the year before as production ramped up. Citation CJ4 business jet deliveries increased to 48 last year, compared to 19 the year before. Citation Mustang deliveries, meanwhile, fell from 73 in 2010 to 43 last year.

Bombardier delivered 43 Learjets, compared to 28 a year ago.

Hawker Beechcraft

Hawker Beechcraft delivered 113 general aviation airplanes during the first three quarters of 2011 and 74 T-6A and King Air aircraft for military use. That compares to 126 general aviation aircraft and 69 planes for military use in 2010.

For months, Bill Boisture, chairman of Hawker Beechcraft Corp., has described the market as “bumping along the bottom.”

Last year, Boisture predicted that demand in 2011 would be much like 2010, and 2012 would be much like 2011.

“I have to say, sadly we were right,” Boisture said Tuesday about demand last year. “We’ve felt like and thought for many reasons that ’12 would be a lot like ’11. And I can’t see much reason yet why that would be different.”

He hears the discussion that the economy is improving.

“I hope for the sake of the American people that that’s true,” Boisture said. “But I would say that I don’t think that has really filtered through into a significant change in the aircraft market in our sector.”

People are beginning to be a little more optimistic — or maybe they’re more accepting that today’s economy is now the new normal and they have to grow their business, he said. And if buying an airplane is needed to grow it, they have to figure out how to do that in today’s circumstances, Boisture said.

The company has figured out how to be better at aggressively selling airplanes in today’s market, he said.

“Our team continues to improve and continues to have a tighter focus,” Boisture said. “I think we’re getting better at it.”

He said he “wouldn’t be surprised” if the company delivers more airplanes in several of its product lines this year.

The availability of financing remains a big issue, however, especially in the light jet through piston aircraft market segments, he said.

“The amount of equity that a buyer has to come with to get aircraft financing for a new airplane is significantly higher,” Boisture said.

Financing is less of an issue with higher-priced airplanes and almost nonexistent an issue in the large jet category.

Working with the FAA

One of the biggest issues facing manufacturers, said GAMA’s Bunce, is the need to streamline the certification process.

The volume of certification activities from planemakers is on the rise, and there is pressure to keep up, said Walter Desrosier, GAMA vice president of engineering and maintenance.

“We’re working with the FAA to move to a more systems safety oversight,” Desrosier said. The way it does certification today is by reviewing and approving every drawing and every test.

“They’re involved in the minute details of routine day-to-day activities that are the same. It’s the same widget being designed for one airplane to the next airplane to the next airplane.”

There’s interest and support today for the FAA to focus on a systems safety oversight that would leverage limited resources to focus on “safety critical” areas, new technologies and new manufacturing methods, Desrosier said.

To do that means the FAA would oversee a company’s program that has FAA-approved processes and procedures.

“The FAA would oversee how they’re doing that and the FAA would be able to accept that,” Desrosier said.

Language in the FAA reauthorization bill signed by the president includes a commitment for the industry and the FAA to work together on ways to be more efficient, Bunce said.

“We’re very encouraged,” Bunce said. “It has to get done. There is a gigantic bottleneck there. The amount of work is accelerating while budgets are diminishing.”