KATE SARSFIELD/BUSINESS AND GA EDITOR
Trough set to continue, but forecasts more hopeful for 2005
Soft economies and political instability around the world will continue to dog the business and general aviation industry for the next 12 months, as orders and deliveries continue their two-years-old decline.
Latest business aviation forecasts by powerplant manufacturers Honeywell and Rolls-Royce predict the trough will continue in 2004, and slow steady growth will not begin until 2005. This upturn will lead to a period of sustained recovery to annual deliveries that, both forecasts predict, will be higher by the end of the decade than at their previous peak in 2001.
The persistent weakness in manufacturers' orderbooks has been exacerbated by the slower than expected growth in fractional ownership. This hugely significant market sector, which according to Honeywell accounts for 40% of the 1,500 current orders, options and deposits for new aircraft, has taken a battering from the drop in consumer confidence resulting in order cancellations.
Fractional growth
For fractionals as for manufacturers, recovery is unlikely until early 2005. Honeywell expects fractionals to grow from their current level - 6% of the global fleet and 15% of annual shipments - to 10% of the fleet and 20% of deliveries by 2012. These predictions assume a growing economy and the return of customer confidence, the absence of which are having serious knock-on effects on business aircraft production rates.
According to the General Aviation Manufacturers Association (GAMA), aircraft shipments in the first nine months of 2003 fell to 1,602 units, over 9% lower than for the same period in 2002, while industry billings fell 24% to $6.43 billion. The knock-on effect of the temporary shutdowns across the manufacturing plants of Bombardier, Cessna, and Raytheon hit business jet deliveries hard, with shipments falling 32% to 338 aircraft, compared with 498 deliveries for the first nine months of 2002, says GAMA.
Business aircraft sales are tied closely to the economy, and manufacturers are keen to isolate their strong orderbooks from the worst effects of the downturn. In this customer-driven sector, the key is to sustain buyer expectations through new aircraft designs. Over the following 12 months a clutch of new aircraft will enter service or reach significant programme milestones. Bombardier, which in 2003 certificated and delivered its super mid-size Challenger 300 and increased performance Learjet 45XR business jets, is expected to gain approval for the Learjet 40 light jet in 2004. The Canadian manufacturer will continue to develop its super-large Global 5000, and the next-generation Global Express XRS.
Approval was granted last month for Gulfstream's G500, for which deliveries are scheduled to begin early in 2004, along with certification of the Savannah, Georgia-based manufacturer's GIV derivative, the G450, in the fourth quarter. Cessna has a hectic year ahead with certification and service entry of its long-awaited Citation Sovereign mid-size business jet. The superlight Citation Excel replacement, the XLS, the CJ3 light jet and revamped Citation X high-speed business jet are all lined up for market entry in 2004. Raytheon expects certification and first deliveries of its delayed Hawker Horizon super mid-size business jet in the latter part of the year.
For turboprop manufacturers, the next 12 months will mark the approval of a host of single engine types - Grob Aerospace's G10TP Ranger, VulcanAir's 600W Mission, Extra Aircraft's EA-500 and the Ibis Aerospace Ae270. Operators and manufacturers alike will be looking forward to the long-awaited approval of commercial single engine instrument flight rules operations in Europe, which they expect will stimulate sales of airliner and charter-configured types as acceptance of single-engine turbines gathers pace across the region.
General awareness
General aviation is wrestling with numerous challenges that are damaging sales, not least the historically low take-up for flying training and a general apathy towards private flying. In an effort to reverse the antipathy and stimulate sales, manufacturers are eager to get the cost of ownership down and aircraft reliability standards up.
New Piper Aircraft, which was expecting aircraft delivery numbers to fall last year year by 58 to 232 aircraft, will introduce sweeping upgrades across its general aviation product line, focusing on avionics and powerplants, it says. Cirrus Design has introduced glass cockpits as standard throughout its piston single fleet and recently launched a programme to improve the training available to buyers of pre-owned SR20 and SR22 light aircraft.
Working with UND Aerospace, which also provides training for buyers of new Cirrus aircraft, the Duluth, Minnesota-based company has developed a standardised training programme for certified flight instructors to help pilots transition to the SR20/22. Added to this Cirrus's baseline visual-flight-rules-only model, the SRV, is scheduled to enter service this year, along with a host of other new piston types - the Adam Aircraft A500 and Diamond Aircraft Industries diesel engine DA-42 Twin Star piston twins, as well as the Lancair Columbia 400 and Liberty Aircraft XL-2. Seawind North America, meanwhile, will be hoping its 300C amphibian in 2004 will become the first composite seaplane to gain approval.
The delayed and eagerly awaited release of the final sport pilot rule in the USA will be a welcome fillip for the general aviation industry. Through the creation of a new category of small, simple, low-performance aircraft, sport pilot is seen as an opportunity to revitalise recreational flying and create a new sector of the manufacturing industry.
Rotor market
The next 12 months should hold few surprises for the helicopter market, where operators, faced with a fall in offshore activity in the North Sea and burgeoning prospects in other regions offshore, have begun to restructure or consolidate. Bristow is expected to complete its latest round of restructuring in 2004, while CHC Helicopter will continue with its plans to acquire competitor Schreiner Aviation Group of the Netherlands and become the largest helicopter operator for the oil and gas industry. The C$129 million ($100 million) cash deal is part of CHC's plan to expand beyond the North Sea market and will give the St John's, Newfoundland-based company access to buoyant oil and gas sectors including Cameroon, Chad, Indonesia, the Netherlands and Nigeria.
Against this backdrop, Bell/Agusta Aerospace (BAAC) is expecting certification in 2004 for an offshore variant of its AB139 medium twin helicopter, while Eurocopter may launch a higher-powered version of the EC155B1 enhanced Dauphin to rival the Italian-designed machine, as it works towards certification of the EC225, essentially an upgraded Puma MkII, first deliveries to launch customer CHC in 2004.
Manufacturers and operators alike will continue to focus on the lucrative homeland security and emergency medical services markets, which according to the latest forecast from Rolls-Royce and US analyst the Teal Group, will be dominated by turbine singles and light twins.
Source: Flight International