Textron Aviation – the Beechcraft and Cessna parent – delivered 41 jets in the third quarter, up slightly on the 37 it handed over in the same period last year, in a market that executives describe as “challenging”.
Speaking on a third-quarter earnings call on 20 October, Scott Donnelly, chief executive of Textron, declined to offer a forecast for 2017, but said sales activity this year had been largely in line with expectations.
Sector growth in 2016 has been mostly “driven by the new products that are coming on to the market”, he says, pointing to the Cessna Citation Latitude, which was certificated in June 2015, as an example.
He describes demand for “historical products” as “pretty flat”, while pricing is “up a little on some models and down a little on some models”. Donnelly had complained earlier in the year that fierce competition in the super-light segment in which the Latitude competes had driven down profit margins on the jet.
With the market in this state, he says, finishing the development of new products is vital.
Cessna is currently working on the super-midsize Longitude and large-cabin Hemisphere, with the former making its first flight on 8 October.
“I think, at least in the market environment we exist in today, that’s the only way to drive growth, and you continue to expect that the legacy historical product lines will be relatively flat,” says Donnelly.
Demand for the King Air, he says, has “been pretty steady through the course of the year”, although lower than 2015, and deliveries of the twin turboprop in the third-quarter were flat year-on-year at 29.
He blames the challenges in the international market – which accounts for about one-third of King Air sales – for the softer demand, but stresses that the turboprop “continues to be a pretty popular product”.
Textron Aviation’s backlog stood at $1.1 billion at the end of the third quarter, flat against the previous three-month period.
Source: FlightGlobal.com
