Manufacturer to slash year-on-year tally by one-sixth as upturn bides its time

Cessna is to cut Citation business jet production to 250 aircraft in 2003, from 300 this year, despite a slight market recovery. Gulfstream, meanwhile, is holding on to $51 million in downpayments from Avolar until it can find new buyers for aircraft ordered by the defunct fractional-ownership company.

Cessna parent company Textron says the 33 net business-jet orders booked in the first quarter keep the manufacturer on track for a full-year total of 120 aircraft. Including the backlog of 140 orders for 2003 delivery, this is enough to sustain production of 250 aircraft next year. Cessna has cut production after delivering 313 Citations last year.

"We saw a rebound in the first quarter, but not sufficient to impact production," Textron says. The reduction will mainly be in production of the entry-level Citation CJ1 and CJ2, which will account for 35 of the 50-aircraft cut next year. The company says there will be almost no reduction in the planned production of super mid-size Citation Xs. As a result of the higher mix of larger aircraft, Cessna is expected to maintain its profitability next year.

Gulfstream has no production cuts planned despite the cancellation of firm orders for 36 aircraft for United Airlines' Avolar subsidiary. The manufacturer is confident it can resell the six aircraft due for delivery this year, but parent company General Dynamics says it will not return the $51 million in deposits until the Avolar aircraft are sold. "If we remarket the aircraft successfully, the contractual dispute will go away," the company says.

Gulfstream saw signs of market recovery in the first quarter, and says less than 20% of production planned for this year, "including the Avolar aircraft", is still for sale, down from 30% at the start of the year. "We are just beginning to see the Fortune 500 firms getting off the bench," the company says.

The demise of Avolar has reduced Gulfstream's total backlog by $2.5 billion to $6.4 billion, and its firm backlog by $800 million to $4.5 billion. Executive Jet's NetJets fractional-ownership programme represents 43% of the firm's funded backlog, against 48% for other commercial customers and 9% for government buyers. Executive Jet exercised options for additional aircraft in the first quarter, says Gulfstream.

Raytheon Aircraft saw orders improve in the first quarter. Bookings were boosted by the merger of its Travel Air fractional-ownership subsidiary with Flight Options, which resulted in its order for 115 business jets, worth $900 million, being added to the firm orderbook. But even without the boost, orders for Beechjets, Hawkers, King Airs and pistons rose to 36 in the first quarter from 11 in the same period last year.

Directory call For inclusion in the Flight International 2002 Corporate Aircraft Directory, contact David Reynolds at Air Transport Intelligence on Tel: +44 20 8652 3859; Fax: +44 20 8652 3898; E-mail: atidata@rati.

Source: Flight International