After a disappointing 2016, Gulfstream expects deliveries of outfitted business jets to increase slightly in 2017 as the entry-into-service of the G500 replaces the venerable G450 in the market, executives of the parent company General Dynamics said on 27 January.
Gulfstream’s one-year outlook forecasts deliveries of 90-95 outfitted large cabin business jets and 25-30 small cabin aircraft. By comparison, Gulfstream delivered 88 large cabin and 27 small cabin aircraft in 2016, a significant decline from 120 large cabin and 34 small cabin jets in 2015.
The anticipated rebound in the large cabin space comes as Gulfstream is scheduled to deliver the first outfitted G500 by the end of the year. Unveiled to the public in 2014, the G500 is being prepared to receive an airworthiness certificate from the US Federal Aviation Administration later this year. The same milestone for the larger G600 is scheduled a year later, with entry into service following in 2018.
The arrival of the first G500 will likely follow the final delivery of the G450 by several months. As of 26 January, Gulfstream had only one order for the large cabin business jet, which was expected to be delivered in the first quarter, says Jason Aitken, senior vice-president and chief financial officer at General Dynamics.
Gulfstream also has been encouraged by signals suggesting a sales rebound began to gather momentum in the second half of 2016, Aitken says, addressing analysts on a fourth quarter earnings call. Although the backlog for the G450 is nearly exhausted, the G650 boasts a 24-month backlog at current production rates. The G550 has a roughly 12-month backlog, Aitken adds.
For the first time, General Dynamics released long-range revenue and earnings guidance for Gulfstream, projecting a compounded annual growth rate of 5.3% for sales and 5.9% for operating earnings, with growth accelerating with the ramp-up of the G500 and G600 in full-swing by 2020.