2010 another tough year for manufacturers

You know it’s a recession when the best news available is that worldwide aircraft deliveries are declining more slowly than last year. That’s the case with first quarter aircraft delivery totals issued by the General Aviation Manufacturers Association (GAMA).

In an unrelated telephone call with market analysts May 11, Hawker Beechcraft Chairman and CEO Bill Boisture, Jr. identified both 2010 and 2011 as tough years. “I think we look forward to the balance of this year and next year as being difficult years for the business and general aviation segment. We are optimistic about our trainer and attack segment, as well as our aftermarket. Those two provide a lot of stability going forward.”

GAMA members reported 390 aircraft deliveries from January through March, including piston-engine aircraft, turboprops, and business jets. That’s down 69 aircraft compared to the first quarter of 2009. But, hey, that’s a smaller drop than reported for the first quarter of 2009 when deliveries dropped a shocking 326 aircraft. (There were 459 aircraft delivered in the first quarter of 2009, compared to 785 in the first quarter of 2008.)

While deliveries were down, total billings were up. Total industry billings grew 7.1 percent in the first three months of the year to $4.64 billion due to international deliveries of large-cabin, long-range airplanes where customers rely less on third party financing than the remainder of the industry. First quarter billings in 2010 are still 12.6 percent below this same period in 2008.

“These numbers are being released on the heels of Europe’s premier business aviation show, the European Business Aviation Conference and Exhibition, where many of our manufacturers noted that the market seems to be stabilizing,” said GAMA President and CEO Pete Bunce. “Reported flight activity from the FAA and EuroControl is on an upward trend, and the used aircraft inventory is slowly decreasing. However, these first quarter figures reveal that our industry is far from a recovery.”

How far? GAMA officials will say only that 2010 will be another tough year for manufacturers. GAMA says that the continuation of bonus depreciation will be crucial to allow the industry to increase production and bring back lost jobs.

The piston airplane segment was down 7.3 percent in the first quarter, with 166 units delivered as compared to 179 airplanes in the first three months of 2009. The turboprop segment delivered 60 units, down from 89 units during the same period in 2009 for a 32.6 percent decrease. Business jet shipments fell 14.1 percent in the first quarter with 164 airplanes delivered, as compared to 191 business jets in the first quarter of 2009.