2017 MAY TURN OUT TO BE GOOD
The business aircraft manufacturers are buoyed by the prospects of the market improving and are showing better second quarter results compared to the same period last year
TTHE MARKET FOR BUSINESS AIRCRAFT is at an interesting point. There is a slow but continued downward trend for the jet and turboprop segments, though the light jet market seems to be an exception. This notable exception could in fact bring about cheer in 2017 and beyond and the General Aviation Manufacturers Association (GAMA) is willing to predict that the jet market may return to the 800 range for annual deliveries. As we head to the National Business Aviation Association (NBAA) event at Orlando, Florida, from November 1 to 3 and as the US gets totally seized of the presidential elections, there appears to be hectic activity in the sphere of business aviation. Shipment wise, however, GAMA has said there were possibilities of the market gaining ground during the latter half of 2016 with the US Government allowing “100 per cent expensing tax provision” that gets tax relief on purchase of new aircraft.
The second half of 2016 should be good, though in the first half industry airplane shipments declined 4.5 per cent to 970 units, and airplane billings fell 11 per cent from $10.4 billion to $9.3 billion. Rotorcraft shipments also dropped 16.1 per cent from 467 units during the same period a year ago to 392 units in 2016. Billings for rotorcraft fell 32.5 per cent from $2.1 billion to $1.4 billion.
Piston airplane deliveries were down 4.5 per cent, from 464 units to 443 units. Turboprop shipments declined 4.9 per cent, from 247 units to 235 units. Additionally, 292 business jet airplanes were shipped in the first half of 2016, a 4.3 per cent dip from the 305 units shipped during the same period last year. Piston rotorcraft fell 10.1 per cent, from 129 units to 116 units, and turbine shipments were down 18.3 per cent, from 338 units in 2015 to 276 units in the first six months of this year. “In a challenging global climate, every segment of the fixed-wing and rotorcraft market showed declines for the first half of 2016,” GAMA President and CEO Pete Bunce said.
The good news amid this depressing market trend has been that the business aircraft manufacturers are buoyed by the prospects of the market improving and are showing better second quarter results compared to the same period last year. The graph has been inching up painfully slow.
EMBRAER’S LARGE BUSINESS JETS PICKS UP STEAM
The Brazilian aerospace major Embraer which took the fourth spot in the first half having delivered 26 in second half and 49 year to date, has shown a 33 per cent increase in deliveries of its large-cabin class business jets in the third quarter. However, from its array of executive aircraft its performance was not that impressive. Embraer shipped 25 business jets for the third quarter with the break-up being 12 Phenom 300; one Phenom 100E; six Legacy 450; four Legacy 500 and two Legacy 650 and has order backlog of $21.4 billion. The delivery figure is down by five jets from the third quarter results of 2015 when it shipped 30 aircraft.
CESSNA TOPS IN LIGHT JETS
Heralding a fairly good performance was Cessna of Textron Aviation. With its line of Citation jets, Caravan turboprops and classic piston aircraft they have started dominating the skies. This year, so far, it has had a good run having notched up jet deliveries of 79 in the first half (second quarter it delivered 45 jets). However, in the single-engine turboprops the company was not doing as well as it did last year, reporting 10 deliveries less from last year to this year’s 32 year-to-date.
Canadian manufacturer Bombardier trailed with 73 units. The small aircraft market is the first to show signs of recovery, driven by new entrants in the high net worth individual bracket who maybe comfortable beginning with acquisition of light jets. Somehow, the Canadian manufacturer has been having distraught years, seeing substantial nosedive in deliveries, down 73 from 92 in 2015. Bombardier’s billings too slipped to $2.81 billion from $3.50 billion for the first half of 2015.