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By Thomas Black
By Thomas Black
DALLAS – Business-jet shipments worldwide rose last year for the first time since 2008 as corporate purchases of larger planes aided an industry that saw deliveries tumble by almost half during the recession.
Manufacturers shipped 678 of the planes, six more than in 2012, the Washington-based General Aviation Manufacturers Association said today in a statement. That included a gain of 22 percent to 249 for the bigger models, while mid-size and smaller planes fell 8.3 percent to 429.
“We’re heading in the right direction, but we’re definitely not out of the woods yet,” Pete Bunce, the trade group’s president, said in a telephone interview. “If you peel back the onion and parse the numbers a little bit, there are still significant problems in the light-to-mid area.”
CEOs from large companies are flying farther as international business expands, spurring demand for the biggest jets from makers such as Gulfstream Aerospace Corp. and Dassault Aviation SA. Manufacturers such as Textron Inc.’s Cessna that make smaller models still face a slow economic recovery, sparse financing and cheap used planes, Bunce said.
Gulfstream, a unit of Falls Church, Va.-based General Dynamics Corp., reported a shipment increase to 121 large-cabin planes from 83 in 2012, driven by the G650, its newest and biggest aircraft. Dassault, based in Paris, delivered 43 of the Falcon 7X, its largest business jet, up from 37.
Profits for members of the Standard & Poor’s 500 Index rose 19 percent to a record $981 billion last year, according to data compiled by Bloomberg. That’s normally a good indicator for jet demand, Bunce said. Sales of smaller jets have been held back by subpar economic growth in North America and Europe, which together accounted for 68 percent of deliveries.
Business-jet deliveries are expected to rise 10 percent this year as the inventory of used planes falls and flight hours increase, Joseph Nadol, a JPMorgan Chase & Co. analyst, said in a Feb. 12 note. Bunce declined to forecast 2014 shipments.
“New demand remains tentative for now and any recovery should be gradual,” the New York-based analyst wrote.
Among other general-aviation aircraft, shipments of turboprops rose 10 percent last year from 2012, as a drilling boom in the U.S. increased the need for planes that can land at small airports near oil and gas fields in shale formations, Bunce said. Deliveries of even-smaller piston airplanes were up 2.7 percent.
Shipments for all general-aviation aircraft, including business jets, turboprops and piston planes, climbed 4.3 percent to 2,256. The value jumped 24 percent to $23.4 billion because of more large, expensive jets, Bunce said. In 2008, 3,969 planes were shipped, with a value of $24.8 billion.
This year, small and mid-sized jets will get a boost from new products that just have begun or are about to start deliveries, including Cessna’s Citation M2, Embraer SA’s Legacy 500, Bombardier Inc.’s Learjet 75 and Honda Motor Co.’s first aircraft. Almost all jet makers kept investing in new models even as sales lagged, Bunce said.
During the next few years, business-jet growth will depend mostly on the pace of the North American and European economies, he said. In the long run, demand from emerging markets will rise as new airports in countries such as China, Brazil and Indonesia allow more general-aviation flights, Bunce said.
“We’re trying to expand the pie,” he said. “Aviation is expanding in all parts of the world.”