What are the New Airplane Shipment Trends in Q1 2018?

What are the new airplane shipment trends in Q1 2018? Which OEMs enjoyed increased jet and turboprop sales, and what were the market undercurrents? Mike Potts assesses the market…

The General Aviation Manufacturers Association released its Q1 2018 new airplane shipment data, and it contains all the hallmarks of a continuing flat market for business aircraft.

Total fixed-wing aircraft deliveries rose 2.8% from a year ago to 447 units, compared with 435 in Q1 2017. Turboprops were the strongest segment at 115 units, which GAMA listed as gaining 12.7% over last year’s total of 102. The reality for business turboprops was even better...

Business jet deliveries came in at 132, up two from the 130 units delivered in Q1 2017 (+1.5%). Piston aircraft shipments lagged last year, with 200 units versus 203 the year before (-1.5%).

Fixed wing billings were up 3.3% from $3.71bn last year to $3.83bn this year. “We are pleased to see the industry is, overall, trending upward” remarked GAMA President and CEO Pete Bunce. “We expect the introduction of new products to drive future growth.”

Jet Market Overview

There can be little question that new products are spurring what growth there is in the current market. The best-selling jets in Q1 2018 were the Hondajet, Citation Latitude and Challenger 350, all tied for first place in the sales race with 12 units each. All are recent introductions to the market.

It is also an interesting statement on the status of today’s market that only one of the three sales leaders, Honda, have a product that could be considered an entry-level jet. The other two are in the upper-middle portion of the market range. Thus, low cost is not a requirement to generate good sales volume in business jets today.

Looking at the specifics of the jet market we see a field of 11 OEMs – two more than in Q1 2017.  Clearly the soft market isn’t deterring new entrants.

Five (including the two new OEMs) enjoyed improved results over Q1 2017, four were down, one was level and one (Dassault) only reports on a half-yearly cycle.

The leader in the jet market in Q1 2018 was Textron’s Cessna unit with 36 deliveries, up one from 35 a year ago. The market-leading Latitude accounted for fully a third of Cessna’s deliveries.

Second place in jet deliveries went to Bombardier, with 31 shipments. Like Cessna, Bombardier was among the jet OEMs with better sales than last year (29 units shipped). Bombardier’s leading product is the Challenger 350, which matched Cessna’s Latitude with 12 deliveries for Q1 2018.

Challenger 350 shipments were up from nine in Q1 2017, Citation Latitude shipments were up from ten shipped in that period. Regrettably, the rest of the market is not doing so well.

Gulfstream captured third position in jet deliveries with 26 units for Q1 2018, down from 30 a year ago. The weakness is clearly in the upper-end of the market, as Gulfstream’s G150 and G280 series airplanes reported seven deliveries both this year and last. Its high-end G450, G550, G650 and G650ER models were down from 23 last year to 19 this year.

Gulfstream does not report its deliveries by individual model so it is impossible to tell whether any of its models might have exceed the 12-unit total recorded by the market leaders.

Fourth, fifth and sixth places in jet deliveries were hotly contested, with Honda capturing the fourth position having shipped 12 units. Embraer narrowly edged out newcomer Cirrus for fifth by a margin of 11 to 10. Honda and Embraer’s results trailed the prior year’s Q1 results when both shipped 15. Cirrus started shipping its VisionJet in Q2 2017.

Boeing (seventh) reported four deliveries, up from three a year ago, while Pilatus (eighth) joined the ranks of GAMA’s jet OEMs this year with two PC-24 light jet shipments.

With a solid backlog for the PC-24, Pilatus can be expected to move up in the years to come, although their delivery schedule does not appear to be overly aggressive. Cirrus appears to be a better candidate to challenge for the top delivery positions, perhaps as soon as later this year.

Neither Airbus nor ONE Aviation reported any jet deliveries for Q1 2018. Airbus reported none throughout 2017 (though discussions with company officials lead us to believe Airbus makes business aircraft deliveries it does not report to GAMA). ONE Aviation will discontinue its Eclipse EA-550 in favor of a new EA-700 model. In Q1 2017, ONE delivered three aircraft.

While the jet market’s failure to accelerate much from last year’s performance is a disappointment, it should not come as a huge surprise. Honeywell and JETNET iQ, the premier forecasting organizations in the business jet industry, predicted last fall that this year would likely be only marginally better than last. Honeywell’s assessment is that things should begin to pick up in 2019.

Turboprop Market Overview

Things are picking up in the turboprop market where GAMA reports deliveries to be up 12.7%, versus Q1 2017. As a matter of fact, they’re doing quite a bit better than that!

Excluding the agricultural airplanes, the market is actually up 26.8%. Delivery totals number 71 units for Q1 2018 versus 56 in Q1 2017.

Of the nine traditional turboprop OEMs reporting to GAMA, five are ahead of last year’s pace, two are even and two are down.

Textron’s Beechcraft segment regained the top spot in turboprops after nearly being overtaken by its Cessna stablemate last year, and finished well ahead of its competitors with 17 units, up from 12 a year ago.

Second place was a tie between Textron’s Cessna unit and Pilatus, both of whom made 12 deliveries for Q1 2018. Cessna’s total was up from eight a year ago while Pilatus matched its Q1 2017 results.

Piper’s ten deliveries was good enough for fourth place and represented a significant gain from the four shipped in Q1 2017. Fifth place went to Daher with eight units delivered, up from seven the year before. Sixth-placed Quest reported seven deliveries, down from nine the year before.

Rounding out the turboprop market were Piaggio with three deliveries (something of a surprise since they reported only two sales all last year, both in Q4) followed by Pacific Aerospace which had two, matching its prior year total and AVIC which made no shipments in Q1 2018 (versus two in Q1 2017).

In previous years the agricultural airplanes have tended to buoy GAMA’s turboprop numbers, making the market appear to be performing better than it was. This year, being relatively flat, they actually dragged the market down. It will be interesting to see if the non-agricultural turboprops can support this growth rate in the coming quarters.

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