Winners and losers at mid-year
The Mid-2016 delivery statistics are out – and the headline numbers are not encouraging. Overall, fixed wing aircraft shipments are down by 4.5%, according to the General Aviation Manufacturers Association (GAMA) with all other sectors showing the same trend. Billings were even more depressing with a fall of 11% compared with the previous year. For rotorcraft, the picture seems bleaker with shipments down by over 16% and a massive 32.5% fall in revenues.
However, you have to dig into the details to understand the whole picture. As reported on previous occasions, judging the general aviation industry on data from 36 companies, worldwide, selling aircraft from Boeing BBJs to Champion Decathlons, fails to tell the whole story. Also, the delivery taking place today follows an order placed many months, even years, before. So, the GAMA numbers may not tell us much about whether customers are making purchase decisions at the present time. Generally, the second quarter figures for aircraft shipped were up on the first quarter – but that is a common factor every year and offers no particular encouragement.
Must-read: Mid-year update – flat as can be
Looking first at business jets and turboprops, the total number of aircraft shipped is 409 for the half year – a slight drop from the 420 of 2015. This does not include single-engine turboprops. Neither Airbus nor Boeing added much to the statistics with just one BBJ delivered in the early part of the year. Financially, the corporate jet market leader continues to be Gulfstream, which delivered 61 aircraft including 15 of the mid-size G150 and G280, although this was a bit down on last year’s 71 total, and its revenues of $3.27 billion were also less. Bombardier delivered more aircraft in the half year than Gulfstream with a total of 73, largely made up of 30 Challenger 350s and 28 Globals, but this was fewer than the 92 units of last year and revenues were down by nearly 20% at $2.8 billion. Meanwhile, Textron’s turbine deliveries, at 160 were marginally down on 2015 due to fewer King Air completions.
On the other side of the coin, Honda Aircraft is into the first year for the HondaJet HA420 and they handed over ten units. Embraer has had a good year so far, delivering 49 aircraft – up from 45 last year and substantially improving its sales volume to $604 million. Its star performer continues to be the Phenom 300, of which 26 were delivered. Embraer also handed over six Legacy 650s, and the Legacy 500 is now on stream with eight delivered. The large-cabin midsize sector is proving to be very competitive with the Legacy 450/500 facing Textron’s Citation Latitude. Cessna delivered 16 Latitudes by the end of July and leveled criticisms at Embraer for unfair pricing. Which leaves Dassault in the business jet pack. The French manufacturer delivered 15 aircraft by mid-year, compared with last year’s 18 but should be pleased with a substantial increase in billings – up over $20 million at $656 million. We look forward to the Falcon 8X coming on stream later this year, but Dassault is suffering from the delay of the Falcon 5X program due to engine issues.
The single-engine turboprop market continues to be resilient with Daher’s TBM900/930, the Pilatus PC-12, Piper M500 and Cessna’s Caravans all competing in the business aircraft market. Total deliveries of these was 99 for the first six months of the year – just a shade below the 102 of last year. In addition, the utility Quest Kodiak and PAC750XL added 16 and three units respectively. Daher was busy handing over the first 13 examples of its upgraded TBM930, which was launched in April, but only eight M500s were delivered by Piper, half of 2015’s total, although their higher performance M600 should boost the numbers later this year.
Most of the light aircraft manufacturers have struggled with either flat or reduce volumes, with the exception being Cirrus, which has bucked the trend with a significant increase in deliveries from 117 last year to 153 this time – mainly due to constant product improvements leading to growth in sales of their top-of-the-line SR22T model.
And then, there are the helicopter manufacturers. On the face of it the figures are depressing, but they are the product of very mixed results. In fact, the market leader, Airbus Helicopters, has performed extremely well, with 146 units delivered (up from 113) and sales up by 19% at $657 million. Its strong contenders are the H130 (32 delivered) and the H145 (37 delivered) but only one H175 was completed and the H225 has suffered heavily from its second grounding following accidents. Sikorsky, which delivered 23 helicopters last year has handed over just five S-76s – and has not completed any S-92s which meant that income collapsed from $455 million to $89 million. Bell Helicopter also delivered just 54 helicopters, mainly 407s, which is down from 74 last year. Generally, the small manufacturers, Guimbal and Enstrom, have held their own, but Robinson has seen its total slide from 173 to 116 with a commensurate drop in value, mainly because sales of the higher-priced turbine R66 have more than halved.
And, what are the prospects for the rest of 2016? Probably more of the same, but some OEMs are showing considerable strength and the market is waiting for the arrival of new models such as the Gulfstream G500 and Falcon 8X. It is wait and see – and fingers crossed in the hope of signs of an upturn!