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Business Aviation, General Aviation, UPDATES

SUMMARY: General Aviation aircraft deliveries for the 1st half of 2016 are down overall, with few winners, twin turboprops (King Air’s) are down 9%, single engine turboprops are down 3.1% while business jets are down 4.2%. Bombardier deliveries are down 20.6%, with Learjets off by 57% as that brand is about to be sold, while once “cash cow” Global 5000/6000’s deliveries are down by 24.3%, adding to the misery at Bombardier these days. The Piaggio Aerospace P.180 Avanti EVO has 1 delivery after only 8 deliveries since 2013, and the program is set to be cancelled by its owner Mubadala Development (UAE), putting an end to the struggling program (continuing with the military UAV Hammerhead version) which peaked in 2008 with 30 deliveries, but could never really compete with the King Air 350/25/200 line. Pacific Aerospace (New Zealand) cannot get its single engine turboprop PAC 750XStol moving and so far only 3 deliveries this year, (4 in total for 2015) even though it is a great aircraft but poor marketing and sales are killing it slowly, and with only 18 deliveries since 2013, it cannot survive much longer on such low production rates (while closest competitor Quest Kodiak 100 will see 39 deliveries this year). Like many GA companies, Pacific Aerospace is setting up an assembly line for its PAC750XStol in China in the “HOPE” things will change for the struggling company, but they won’t, China is a “black hole” for GA aircraft projects. Piper Aircraft has delivered only 8 x MA500’s this year as customers wait for the “new” M600 whose wing was failing on static load tests, and not offering the quantum leap in performance Piper needed (+14 kts, +484 nm in range, Garmin 3000 avionics with the same engine, airfield performance, cabin and limit of FL280 for an extra $US 840,000 ?) to stay competitive in the turboprop market, while a tired old product line is making the current owner (Government of Brunei) rethink its ownership. Lastly, Pilatus Aircraft is having a great year with the PC-12NG with already 38 deliveries this year versus 18 same time last year, BUT times are changing and this market dominance will end soon, as Textron Aviation introduces its PC-12NG competitor, the new $US 4.5 million Denali, a 10 seat, 285 kts cruise and 1,600 nm range single engine turboprop, powered by a new generation GE engine of 1,240 shp, 20% more fuel efficient than comparable PT6 engine. Looks like Pilatus is getting its pay back for entering the jet market with its PC-24, and you can bet the days of 70 to 100 annual deliveries of PC-12NG’s will soon be over as its “monopoly” on that segment will finally be challenged.

The General Aviation aircraft shipments for the 1st half of 2016 are out and show a disturbing situation across most segments versus 2015 numbers, as manufacturers are adjusting supply to the lower demand in most market segments.

  • READ: BLOG OF FEBRUARY 16, 2016 ON – GENERAL AVIATION AIRCRAFT DELIVERIES IN 2015 

Single engine turboprop deliveries are down to 185 units from 191 (-3.1%), while twin engine turboprop deliveries are down to 50 units from 55 (-9.0%), and business jet deliveries are down to 292 units from 305 (-4.2%) a year ago.

 

The WINNERS in 2016 so far are Pilatus Aircraft, Quest Aircraft and Thrush Aircraft for having a much better year than 2015.

turbines2015-PC-12_PlanespottersNet_311465turbines-kodiakag-thrush2

 

The LOSERS in 2016 and beyond are Pacific Aerospace, Piaggio Aerospace and Piper Aircraft, all having a bad 2016 and all three struggling to stay in business.

pac-1547411piaggio evo2Piper M500

 

**Note: Above turboprop numbers do not include 18 passenger turboprop manufacturers like Canada’s Viking Air (Series 400 Twin Otter x 18 units per year), Switzerland’s RUAG (Dornier 228 x +/- 5 units per year), Czech Republic’s Aircraft Industries (LET-410, +/- 14 units per year) and China’s AVIC/Harbin (Y-12, +/- 15 units per year).

 

Let’s take a quick look at the few winners and many losers this year.

  1. Air Tractor (USA), the manufacturer of Agricultural aircraft delivered only 49 aircraft down from 66 last year (-25.7%), as its “cash cow” AT-802 line (inc. militarized version) has seen deliveries down to 25 from 29 (-13.7%).
  2. Boeing (USA), delivered only 1 VIP BBJ versus 4 last year, while Airbus has not delivered any this year versus 1 last year, as the high end ultra long range segment starts to feel the slowdown in aircraft orders, and Bombardier has to be worried its new Global G7000 will not be the success that it is hoping for.
  3. Bombardier (Canada), delivered 73 jets versus 92 last year (-20.6%), with the Learjet 70/75 brand delivering only 6 versus 14 last year (-57%), as that brand has seen its best days 50 years after the 1st flight of the Learjet 23, the brand is about to be spun off and sold to Textron Aviation most likely. The once “cash cow” Global 5000/6000 deliveries are down to 28 from 37 last year (-24.3%), and still heading downwards dragging the whole Business Jet Division down, with delivery values down to $US 2.805 billion from $3.466 billion last year (-19%), at a time Bombardier products suffer across the board (Q400, CRJ, CSeries, Learjets, Challenger 650).
  4. Daher (France), delivered 18 aircraft (5 x TBM900, 13 x TBM930), down from 25 last year (-28%) and delivery value down from $72.6 million from $94.8 million (-23.4%).
  5. Dassault (France), delivered only 15 of its Falcon 2000/900/7X models down from 18 last year (-16.6%), as it just certified its new Falcon 8X and engine delays are holding up its Falcon 5X program. Delivery value was $656 million, up 3.6%.
  6. Embraer (Brazil), delivered 49 business aircraft, up from 45 (+8.8%), as Phenom 100E and Phenom 300 deliveries are at 35 versus 36 last year, while Legacy 500 and 600/650 deliveries are up to 14 from 8 last year, with delivery value at $604 million (+14.4%).
  7. Gulfstream (USA), delivered 61 aircraft (15 x G150/G280, 46 x G450/550/650/650ER), versus 73 last year (-16.4%), with the total reduction of 12 aircraft coming from the high end G450/550/650/650ER side, another sign that ultra long range aircraft are now finally feeling the softness in demand. Delivery value of $US 3.273 billion is down 17.5% this year on last year.
  8. One Aviation (USA), delivered only 4 new Eclipse 550 jets this year up from 3 last year, as the struggling program tries to find some traction, and announced its new improved “Canada” version with more range and speed. Delivery value is $US 12.6 million. The program cannot continue for too long at these low levels of deliveries, the new “Canada” version will hopefully help sales, as it offers 4 feet of wing span which brings more fuel, range and better airfield performance and climb rates, we shall see, they cannot stay in business too long delivering 3-4 units per year.
  9. Pacific Aerospace (New Zealand), the PAC 750XStol an aircraft that should be selling well is not, and only 3 deliveries this year versus 2 last year, with delivery value of $US 4.884 million, which equates to $US 1.628 million per aircraft, a reduction of 14% on price versus last year, but not stimulating new demand. Hit a high of 15 units in 2008 but only 18 delivered since 2013, bad sales and marketing ? Another program that is struggling to attain long term sustainability as it competes with the Textron C208/208 Caravan and Quest Aircraft Kodiak 100 which have combined for 48 deliveries so far this year. The company has secured an order for 5 PAC 750XStol recently from China, as it develops its assembly line in that country in a joint venture with Beijing General Aviation at the Changzhou Industrial Devlopment Park. The lure of China for General Aviation companies is big, but little success has been achieved by the dozen plus companies setting up assembly in China, in fact durings its 1 2years in China, Embraer produced only 40 x E145’s and 6 x Legacy 650’s ! before phasing that experiment out this year, 46 aircraft in between 2004 and 2016, equals 3.5 aircraft per year, HOPE is not a strategy, China is not the “holy grail” just a desperate move by some desperate companies. READ Previous articles on China’s moves into GA, the country is a “BLACK HOLE” for many bought aircraft programs from the West (e.g. Glasair, Liberty, Mooney, Xtreme, EPIC, Walter Extra, etc.) with a few doing well on their own in the US (Cirrus, Enstrom, Teledyne Continental Motors), and recent production lines announced by Dornier Seastar and Aircraft Industries (LET), its a mess and few will actually be successful producing aircraft in China and selling them globally.
  10. Piaggio Aerospace (UAE), delivered 1 P.180 Avanti EVO this year so far, and 3 last year ? and only 8 since 2013 ? the program is in trouble of being terminated, as the owner Mubadala Development (Abu Dhabi) is looking more at the military market with the unmanned version of the aircraft, known as P.1 HH Hammerhead. The P.180 has never done well, outsold by the King Air 350 line by a huge margin, showing again that “radical” designs do not do well commercially (e.g. Beech Starship).
  11. Pilatus Aircraft (Switzerland), delivered 41 aircraft (3 x PC-6, 38 x PC-12NG), which is +115% on last year’s 19 deliveries (1 x PC-6 and 18 x PC-12NG), with delivery value at $US 191 million up from $86 million last year (+122%). The PC-12 is doing well, but will now face stiff competition with the new $US 4.5 million Textron Aviation’s Denial with a speed of 285 kts, 1+9 seating, powered by a new GE 1,240 shp engine with FADEC and 4,000 hour TBO burning 20% less fuel than comparable PT6. Pilatus has had the 10 seat single engine pressurized market to itself for too long, now that dominance will be challenged as Pilatus dared to take on Textron with its PC-24 business jet, Textron is taking on the PC-12, Pilatus Aircraft’s “cash cow”.
  12. Piper Aircraft (Brunei owned, USA based), the M500 single engine turboprop and only 8 deliveries off 50% from last year’s 16 deliveries as customers wait for the new much delayed M600. The M600 struggled with certification with wing breaking under static tests, and in the end the M600 is only marginally better than the M500, not the quantum leap Piper needed to become a player in the turboprop market. The M600 costs $US 2.85 million, $US 840,000 more than M500, and you get the same PT6A-42A engine, +100 lbs in useful load, +14 kts and +484 nm (+90 USG more fuel capacity) in range with same airfield performance and FL280 (No RVSM) ? An aged product line shows as deliveries are down to 44 (piston and turboprop) from 50 last year (-12%) but delivery value is down to $37.7 million (-28.5%), as the company’s long term viability is surely in question and Brunei looks for an exit.
  13. Quest Aircraft (Japanese owned, USA based), delivered 16 Kodiak 100’s up from 12 last year and expects to deliver 39 in total this year, going to 52 in 2017 and 60 in 2018 as the company expanded its production facility and looks to a new aircraft in the coming years to add to its Kodiak 100. The new aircraft is suppose to be a pressurized utility single, though I still believe there is a market for a large 12,000 MTOW, 18 seat single engine utility with payload of 4,000+ lbs and cruise of 200 kts, to replace twin utility turboprops.
  14. Textron Aviation (USA), delivered 49 King Airs (9 x C90GTx, 13 x 250’s, 27 x 350i’s) versus 55 last year (-10.9%) and 32 Caravans (7 x 208’s and 25 x 208B’s), versus 39 last year (-18%). As for jets, 79 were delivered, with 17 x C-525 M2’s and 16 C680 Latitude’s leading the path, with the C-750 CX+, C-680 Sovereign+ and C-510 Mustang each with just 3 deliveries trailing in a struggling “soft” market. Delivery value was $US 1.286 billion (on 244 aircraft), the 81 turboprops, 79 jets and 84 piston singles and twins, versus last year’s 291 aircraft (97 turboprops, 69 jets and 125 piston singles and twins). So Jets are up 14%, turboprops down 16% and piston are down 33% at Textron this year so far.
  15. Thrush Aircraft (USA), delivered 18 Ag aircraft, versus 10 last year (+80%) with delivery value at $US 27.9 million (+108%).

 

1 SE PRESSURIZED TURBOPROP ANALYSIS

1 SE Utility TURBOPROP ANALYSIS

My above aircraft delivery graphs say it all, about who is a WINNER and who is a LOSER in each segment, on the TOP is the single engine pressurized market and on the BOTTOM is the single engine utility (un-pressurized) market. Below are my RELATIVE COMPARISON Charts as well. Usually aircraft with best relative performance have better customer value and therefore better sales (deliveries), period.

1 SE PRESSURIZED TURBOPROP ANALYSIS2

1 SE Utility TURBOPROP ANALYSIS2

Thank you for reading my blog, hope you learned something, keep the comments coming, till next time, cheers !

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About Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow

I am a Canadian and EU national with an MBA and 33+ years experience in aviation business development with 20 years overseas and work in 25+ countries. A former investment/merchant banker (mergers and acquisitions to corporate turnarounds). airline and OEM senior executive and past owner of 6 successful aviation companies in 3 countries (executive jet charter/management companies, aircraft sales, aircraft broker, airline/aerospace consulting to aircraft insurance). I have a very diverse aviation background with 75+ aviation companies (45+ airlines of all sizes, OEM's, airports, lessors, MRO to service providers) as consultant, executive management, business analyst and business development adviser. Excellent success track record in International Business Development. Most work with airlines is with new start-ups and restructuring of troubled carriers. I sold new business jets, turboprops and helicopters for Cessna, Raytheon, Gulfstream to Eurocopter as an ASR as well as undertaking sales and marketing of commercial aircraft for Boeing, de Havilland, Dornier, Saab and Beechcraft. Brokered everything from LET-410's to B747's and from piston PA31 to G550 business jets. I look beyond the headlines of the aviation news and analyze what the meaning and consequences of the new information really means. There is a story behind each headline that few go beyond. Picked the name Aviation Doctor, as much of my work has been with troubled companies or those that want and need to grow profitably. I fix problems be in the business, and help with restructuring for a better tomorrow. You can reach me with comments or suggestions at: Tomas.Aviation@gmail.com and I comment a lot on Google+, my Facebook and LinkedIN.

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