U.S. Manufacturers Deliver 413 Aircraft in Second Quarter – Up 34 Units from Q2 2017
by J. Kasper Oestergaard, European Correspondent, Forecast International.
According to the General Aviation Manufacturers Association (GAMA), in the second quarter of 2018, manufacturers reported higher deliveries on lower revenues. Fixed-wing general aviation aircraft manufacturers delivered 607 aircraft worldwide in Q2 18, up 7.2 percent from 566 in Q2 17. At the same time, revenues decreased 10.8 percent to $4.7 billion, the result of lower revenues reported by business jet makers Gulfstream, Bombardier, Embraer and Dassault. The increase in deliveries was attributable to higher piston-engine and turboprop aircraft shipments.
U.S. manufacturers delivered 413 aircraft in Q2 18, up from 379 in Q2 17 – an impressive 9.0 percent increase. U.S. manufacturers accounted for 68 percent of worldwide shipments in the second quarter, up from 67 percent in Q2 17.
In Q2 2018, for the fifth consecutive quarter, the Cirrus SR22T (piston) was the most popular fixed-wing general aviation aircraft with 43 units delivered (-7 from Q2 17). The Cessna CE-172S Skyhawk SP (piston) took second place with 41 shipments – up from 31 in Q2 17, followed by the Cirrus SR22 (piston) with 29 units delivered – down from 30 in Q2 17. In fourth place is the Cirrus SR20 (piston) with 26 units delivered, ahead of Piper’s PA-28-181 Archer III (piston), Cessna’s CE-208B Grand Caravan EX (turboprop), the Pilatus PC-12 (turboprop), Gulfstream’s G550 / G650 large business jet variants, Tecnam’s P2008JC (piston), the Cirrus SF50 Vision Jet, and Beechcraft’s King Air 350i / ER (turboprop).
When general aviation aircraft manufacturers are ranked by revenues, the business jet manufacturers take the lead. Gulfstream boasted the highest revenue of all fixed-wing aircraft manufacturers in Q2 2018 with total sales of $1.4 billion, down 16.0 percent from the same period last year. Gulfstream has been the world’s largest general aviation aircraft manufacturer by revenues since 2013. In second place is Bombardier (#1 in 2012) with Q2 18 sales of $1.3 billion, down 9.2 percent from Q2 17. Textron Aviation (Cessna + Beechcraft) is the overall leader by units sold but only ranks third by revenue with $796 million in Q2 18, up from $701 million in the second quarter last year. It is worth mentioning that Cirrus Aircraft had a very strong second quarter, with year-over-year sales up 47 percent following a surge in shipments. Cirrus’ revenues also benefited greatly from 15 deliveries of the company’s SF50 Vision Jet, a single-engine, seven-seat, very light jet aircraft. Honda Aircraft had a very weak second quarter, with shipment values down 43.9 percent. In Q2 2018, the company delivered only five HA-420 jets, down from nine in the second quarter last year.
On February 7, 2018, Swiss manufacturer Pilatus delivered its first-ever PC-24 business jet, and the company can expect to see a sharp increase in revenues in 2018. At Pilatus, however, Q2 2018 revenues were down 1.1 percent year-over-year. Two PC-24s were delivered in Q1 18.
Upcoming Product Launches
In the second half of 2018, Bombardier expects to deliver the first Global 7500 (initially expected in 2016), followed by the Global 8000 during 2019 (initially expected in 2017). With these product launches, Bombardier aims to take market shares from Gulfstream’s successful G650 and G650ER. In April 2018, Bombardier revealed that the Global 7500, having completed multiple long-range flights around the world, now features a maximum range of 7,700 nautical miles. This compares to 7,500 nautical miles for the G650ER.
Gulfstream expects to deliver the first G500 later in 2018, having amassed 5,000 flight hours with five G500 flight-test aircraft. In July 2018, the G500 received both its type certification and production certificate from the U.S. Federal Aviation Administration. The Gulfstream G600 is expected to be approved by the FAA by year-end, with deliveries following in 2019.
Recent History & Market Dynamics
The recession from December 2007 to June 2009 had a massive impact on the general aviation aircraft manufacturing industry as the sale of business jets and piston-engine aircraft collapsed and were, as of 2017, not even close to their 2007 peak levels. From 2007-2010, the global production of general aviation aircraft dropped a staggering 52.8 percent – from 4,276 aircraft in 2007 to 2,020 in 2010. In the United States, manufacturers experienced a 59.3 percent drop in production – from 3,279 units to 1,334 units – over the same period.
An important reason why deliveries of general aviation aircraft are still way below their 2007 peak levels, both worldwide and in the U.S., is that the price per aircraft has doubled. From 2007 to 2017, the average price of a piston-engine aircraft, which is the most common type, soared from $328,000 to $662,000. That increase is keeping many would-be buyers out of the market. Also, the average price of a business jet increased from $12.5 million to $26.6 million over the same period. At the same time, the average price of turboprops declined from $3.5 million to $2.6 million, resulting in a surge in shipments of this type of aircraft.
The market for general aviation aircraft is highly cyclical, and the small business jet and piston-engine aircraft segments in particular suffer in a down economy. Perhaps a surprise to some, the large business jet segment emerged unscathed from the 2007-09 recession.
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Joakim Kasper Oestergaard is Forecast International’s AeroWeb and PowerWeb Webmaster and European Editor. In 2008, he came up with the idea for what would eventually evolve into AeroWeb. Mr. Oestergaard is an expert in aerospace & defense market intelligence, fuel efficiency in civil aviation, defense spending and defense programs. He has an affiliation with Terma Aerostructures A/S in Denmark – a leading manufacturer of composite and metal aerostructures for the F-35 Lightning II. Mr. Oestergaard has a Master’s Degree in Finance and International Business from the Aarhus School of Business – Aarhus University in Denmark.