Textron Aviation recorded a slight increase in deliveries of its Cessna Citation business jets in the first quarter of 2017, but the modest gain was offset by a sizable drop in shipments of its Beechcraft King Air twin-turboprop.
According to first quarter financial results issued by parent company Textron on 19 April, the Wichita-based airframer delivered 35 new Citations in the first three months of this year, compared with 34 during the same period last year. King Air shipments fell by 14 units over the same period, to 12 aircraft.
Speaking during an earnings call, Textron chief executive Scott Donnelly described the shipment tally for the period as “below plan”, but acknowledged that the aviation division “did a pretty nice job" in the quarter, keeping the company’s cost-base at its expected level. “Given the [low] King Air volume, and what we anticipated in terms of the volume and mix on the jet side, the performance and the cost controls were where they needed to be to deliver on the operating plan,” he says.
Textron Aviation
Donnelly blames the King Air’s poor performance on the international marketplace, where he says buyers have elected to defer their purchase plans due to the unfavourable currency exchange rates.
This market has traditionally accounted for more than 50% of new purchases and deliveries of the all-metal twin, but in the last quarter the tally was only three. “I’d rather turn down a sale than sell at too low a margin,” Donnelly says. “We need to hold the line on pricing to keep the business healthy.”
Donnelly is confident buyers of the King Air 350i/ER, 250 and C90GTx will return, and expects to end the year on 106 deliveries, the same as in 2016.
Overall, the USA accounted for the bulk of new Citation and Beechcraft sales and shipments in the first quarter. Despite some “encouraging activity” in Europe and South America, Donnelly says the USA is unlikely to be toppled from its number one spot this year.
He describes US buyers as “positive, but a little bit guarded”, with many choosing to delay purchasing new aircraft until confidence in its economy is fully restored and the country’s tax reforms have been implemented.
Source: Flight International
