Providing the first sign of a possible recovery in the general aviation sector, Cirrus Design has begun recalling workers to support an increase in production.
Cirrus vice president of marketing Todd Simmons says the manufacturer has begun the process of recalling 55 workers to its facilities in ?xml:namespace>Minnesota and North Dakota as it increases production from six to eight single-engine piston aircraft per week. Simmons says Cirrus began noticing an up-tick in demand in late February and March “with equal participation domestically and internationally” and there will be more recalls if the positive trend continues. “We do have indications that point to more favourable things in the second half of the year,” he says.
Cirrus is still operating well short of the level it was one year ago, when it was producing 12 aircraft per week with about 1,300 employees. Cirrus was one of the first manufacturers to cut production and jobs, initially slashing 500 jobs in August.
As Cirrus was stuck with an excess inventory of aircraft which wasn’t cleared until early this year, more jobs had to be cut in the fourth quarter, taking headcount to less under 700. The 55 workers which are now in the process of returning will bring headcount back above 700.
Simmons says the early cuts turned out to be a “favourable” move as it improved Cirrus’ efficiency and positioned it better for a recovery. “We made changes last year that enabled us to really match production to demand this year. We’re now in a great position,” he says.
He adds Cirrus may also be ahead of other manufacturers in recalling workers and increasing production because of the positive uptake from its new known ice protection system, which was certified in April by the FAA for the SR22 and Turbo, and Garmin Prospective cockpit. “Flight into known ice has been a big market hit and it certainly differentiates us,” Simmons says.
Simmons claims Cirrus also has benefited from business aircraft owner-operators downgrading to piston aircraft due the economic downturn. In recent months Cirrus also has noticed some stabilisation of used aircraft inventories with both values and the level of aircraft available “coming back to more normal levels”.
New aircraft production, which Simmons says was “low and variable” the first three months of the year, moved to six aircraft per week in April. He says demand is already higher than the new rate of eight aircraft per week, meaning another production increase is likely for later this year.
“The hope is in the next three to six months we’ll be able to recall more workers. So far we like what we see – the indications are positive. But we’ll take a very measured approach,” Simmons says.
New customers are now waiting six to eight months for delivery. Cirrus is now on track to deliver roughly 380 aircraft this year, down from 500 in 2008 but above an earlier plan to produce only about 320 in 2009.
Meanwhile, Simmons says Cirrus continues to secure new sales for the new SF50 Vision despite deciding earlier this year to push back certification of the single-engine jet from late 2010 to 2012. He says the order book for the Vision, which is between 400 and 500, is “quite resilient and even with the delay we continue to take deposits”.
He says Cirrus could potentially accelerate the SF50 development programme. “In the next six to eight months we’ll get more in depth evaluation on whether we can accelerate the timeframe if possible,” Simmons says.
Development of the SRS light sport aircraft, however, was “formally suspended” in April. Simmons says Cirrus is now in the process of offering the nearly 200 SRS customers options to upgrade to the SR20/22 or refund their deposits. He says Cirrus plans to eventually re-look at how to address the LSA market but the priority for now is the jet.