Aviation News Item: 05469

17th Feb 2010

Source: kansas.com

Planemakers in Wichita and worldwide delivered fewer general aviation aircraft in 2009 than they have in more than a decade, according to a trade group that tracks the figures. Shipments of piston, turboprop and business aircraft by Cessna Aircraft, Bombardier Learjet and Hawker Beechcraft totaled 1,061 last year, the lowest since they delivered 1,027 in 1997.

In all, aircraft manufacturers worldwide delivered 2,276 aircraft, down 43 percent from the previous year, according to figures from the General Aviation Manufacturers Association.

Billings fell 21 percent from the previous year to $19.5 billion.

GAMA released the figures at its annual industry review Tuesday in Washington, D.C.

There were no surprises in the numbers, Wichita planemakers said.

"Obviously, 2009 was a tough year, and we had to take a lot of difficult steps to bring the company in line with the realities of the market," said Cessna spokesman Bob Stangarone.

The three companies have cut nearly 13,000 jobs in response to the downturn.

Wichita's manufacturers delivered 47 percent of the world's general aviation aircraft last year. The deliveries were down 41 percent from 1,809 in 2008.

Cessna delivered 740 aircraft, its lowest total since it delivered 612 planes in 1997. It delivered 1,300 aircraft in 2008.

Hawker Beechcraft delivered 273 civilian planes, down from 435 in 2008 and its lowest level since it delivered 263 in 2003. The company also delivered 145 T-6A trainers and King Airs to military customers last year.

Bombardier Learjet delivered 48 Wichita-built business jets compared with 74 in 2008. It was its lowest total since delivering 48 in 2004.

"When you look at the amplitude of the downturn, it's significant," said GAMA president and CEO Pete Bunce.

Overall, the piston aircraft market was hit the hardest, with worldwide shipments falling 55 percent to 965. The market was hurt the most by lack of available credit.

"Most of the people buying the higher-end pistons that are affecting the numbers have small businesses," he said.

Those are customers who normally need financing for aircraft purchases.

The turboprop market, meanwhile, fared best in the downturn; deliveries dropped 18 percent to 441.

Worldwide business jet deliveries dropped to 870 from 1,313, their lowest level since 750 were delivered in 2005.

What's ahead in 2010

Aircraft manufacturers are braced for another tough year.

"We're certainly prepared for this year to continue no better than the last one ended," said Hawker Beechcraft CEO Bill Boisture.

Production rates and employment levels have been set for lower deliveries this year, Boisture said.

The industry is closely watching key market indicators, such as the number of flying hours by business jet operators and used business jet inventories for sale.

There are indications the numbers have at least leveled out and "maybe this is the bottom," Boisture said.

Business aircraft flying hours have improved and used aircraft inventories decreased somewhat, "although the used airplane transactions are at significantly depressed prices," Boisture said.

While there's been improvement in the indicators, he said, he wouldn't call it a significant trend.

"We're preparing to be very frugal with our spending this year," Boisture said.

Market recovery is expected to be gradual, Stangarone said.

Cessna's focus also is on reducing costs and staying competitive, he said. "That's the significant challenge for 2010."

In the coming years, the company will be competing with foreign competitors with "formidable cost structures."

"We have to be ready to meet the competitive threat," Stangarone said.

Bombardier's Learjet plant in Wichita has taken steps to align production with the market. It doesn't expect to reduce rates further this year, said spokeswoman Haley Dunne.

Considering the challenging environment, "Bombardier business aircraft recorded good results" for 2009, Dunne said.

A new business jet forecast by Brian Foley Associates predicts demand for 8,900 business jets worth $170 billion to be delivered during the 10-year period of 2010 to 2019.

Record business jet deliveries in 2008 won't be seen this decade, Foley said in a statement, because of tougher financing and a maturing of the fractional industry.

International sales

Deliveries to international customers are rising, however.

For the first time, more than half of the business jets delivered last year were to customers outside of North America.

Last year, about 80 percent of the orders booked at Hawker Beechcraft were from customers outside North America. That's up dramatically, Boisture said.

"That doesn't mean that the international market has grown overwhelmingly large," Boisture said. "It just means our market got significantly small."

That's a reflection that some economies around the world remain in a growth mode, although not as robust as in previous years, GAMA's Bunce said.

Forty-nine percent of the deliveries were to North American customers, a drop of 5 percentage points from 2008.

Deliveries in Europe and Latin America remained flat with the year before, while they rose somewhat in the Asia Pacific, the Middle East and Africa.

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