Orders held up last year but demand for 2003 business jet deliveries remains weak

Business jet manufacturers are again reducing production in the absence of any sign of a market recovery in 2003.

Cessna has cut planned Citation production from 250 to 220 aircraft, despite taking orders for 600 business jets last year. "Cessna had a tremendous order intake, but there is a hole in the backlog for deliveries in 2003 and early 2004," says Lewis Campbell, chief executive of parent company Textron.

Cessna delivered 307 Citations last year, down from 313 in 2001. New orders included 166 Citation CJ3 light jets and more than 300 entry-level Citation Mustangs, but deliveries of the CJ3 will not begin until mid-2004, and late 2006 for the Mustang. Campbell says 74% of 2003 deliveries are already sold.

At the other end of the market, Gulfstream says orders for its large-cabin, long-range business jets held up last year, but sales of its mid-size aircraft were below forecast. The company delivered 85 green aircraft last year, 61 large-cabin and 24 mid-size, and expects to deliver the same number this year, but in a less-profitable mix of 56 large-cabin and 29 mid-size. For 2003, 66% of large-cabin deliveries and 38% of mid-size are already sold, says Nick Chabraja, chief executive of parent company General Dynamics.

Four large-cabin Gulfstreams and "a number of mid-size aircraft" remain unsold from last year. The intake of 133 orders last year was boosted by a 50-aircraft launch deal from NetJets for the mid-size G150, with deliveries to begin in 2005. Other orders were 62 large-cabin (G300/G400/G500/G550), compared with 60 in 2001, and 21 mid-size (G100/G200).

Raytheon Aircraft (RAC) ended the year delivering 20 fewer aircraft than forecast in October. The year-end total included 174 business aircraft. The delivery forecast for 2003 has been cut from 197 business aircraft to 191. "We are 40% booked for 2003, which is a bit tougher than going into 2002," says RAC president Jim Schuster. Deliveries of Beechjet 400As, Hawker 800XPs and King Air turboprops will remain stable, but the ramp up of Premier I light jet production will slow to 49 aircraft, down from the 58 originally planned.

All three manufacturers were hit by falling values and rising inventories of used aircraft. Raytheon ended the year with 22 used business jets, up from eight at the end of 2000, compared with 20 at Cessna, which wrote off $63 million on used aircraft during the year. Gulfstream lost $81 million on the resale of aircraft taken in trade, but had cut its inventory to six aircraft by year-end.

Source: Flight International