GAMA Q1 2017 New Airplane Shipment Analysis
The General Aviation Manufacturers Association released its Q1 2017 business aircraft shipment totals and generally things are looking up a little (although there are still some dark spots in the mix). Mike Potts delves a little deeper…
Total Q1 2017 new airplane shipments were up slightly at 434 units, an increase of 2.8% over the 422 units delivered in Q1 2016. Jet deliveries were up 6.6% (130 units, from 122); Pistons were up 6.3% (203 units, from 191). That’s the good news.
In the ‘disappointing’ category, the turboprop segment was down from last year by 7.3% (101 units, down from 109 units reported in Q1 2016). Total Q1 2017 billings also lagged at $3.56bn, down from $3.99bn in Q1 2016 (a reduction of 10.9%).
Why Are Things Looking Up?
In Q1 2016 jets, turboprops and pistons were all down from their 2015 totals, as were billings. And the year before that, in 2015, jets, turboprops and pistons were also all down. In fact, you have to go back to 2014 to find a year like this one, where jets and pistons were up over the year before. In 2014, the turboprops were also lagging behind the previous year’s Q1 total.
Considering the situation from a ‘trend’ standpoint, this year’s Q1 is the best since 2014. For what it’s worth, 2013 was the last year when all three segments were ahead of the year before, and that’s actually a pretty rare occurrence. There have been only two other years (2005 and 2006) since 2000 when all three segments were ahead of the prior year.
Having two of the three segments ahead of the year before is also comparatively rare. Other than this year it has only happened four times this century (2007, 2008, 2011 and 2014).
Jet Market Specifics
You’ll have probably noticed that this year’s numbers are, nonetheless, a little strange in that jet deliveries are up but billings are down. Usually a surge in jet deliveries will drive billings upward too. Looking at the specifics of the jet market, however, we can begin to understand how billings can lag in spite of an upturn in jets.
The 130 units delivered in this year’s Q1 report put jet deliveries in the same general range they have been in throughout this decade. With the exception of Q1 2014 when jets reached 154, Q1 jet deliveries have been between 123-133 units since 2011. So jet sales can truly be said to be flat and have been for the past seven years.
There is, however, quite a lot of movement going on in a market deemed ‘flat’.
For example, just two years ago Bombardier was leading the market with 45 units. Today it’s in third place with 29.
While Bombardier might contest the assertion that the jet market is flat, today’s market leader, Cessna, finished Q1 2017 with 35 units, up from 34 a year ago and would probably agree that the market is steady. As recently as four years ago, however (Q1 2013) Cessna delivered 38 jets, so can certainly recall when things were better during this ‘flat’ market.
Gulfstream finished Q1 2017 in second place with 30 units, up from 27 a year ago. Four years ago (2013) it had 29 shipments, so again the evidence supports a steady market – although at that time Gulfstream was up by 52.6% over the 19 units reported in 2012 – all of which falls within the timeframe the market has been ‘flat’.
The point is that during this ‘flat’ time, the individual OEMs have experienced some pretty significant ups and downs.
Of the eight jet OEMs reporting deliveries during Q1 2017, four enjoyed improved numbers, including Gulfstream and Cessna; two were even and two suffered downturns, including Bombardier. Dassault now only reports deliveries after Q2 and Q4.
The company with the largest gain was Honda, which finished tied for fourth place with Embraer (who experienced a fairly significant downturn). Honda, which is just finishing its first full year of production, made 15 Q1 2017 shipments, up from three a year ago. Embraer’s 15 Q1 2017 shipments, conversely, were down from 23 units delivered in Q1 2016.
One Aviation tied for sixth place with Boeing – both reporting three deliveries. One Aviation was even with the three units delivered in Q1 2016 while Boeing was up from one unit a year ago. Airbus brought up the rear in the business jet market with no deliveries in Q1 2017, matching the previous year’s Q1 performance.
As we look at the jet market in summary we see the number of smaller jets in the mix increased significantly, particularly with Honda adding its lower cost units. At Bombardier, while the shipment total dropped just two units, the percentage of very high-end units was down markedly; the Global 5000/6000 series was down from 14 units to eight, and the Challenger 350 dropped from 14 to nine. The Learjet series, meanwhile, gained market share from one unit to five.
The bottom line is that more lower-cost jets were sold in Q1 2017 versus Q1 2016, dragging down the billings total.
Turboprop Market Specifics
The turboprop market also had a downward impact on billings. Although it was not readily apparent from GAMA’s headline numbers, when you drill down into the details the turboprop market (particularly the market for twin-engine turboprops) endured a very rough Q1 2017.
Textron’s Beechcraft unit, which historically leads the turboprop market by a comfortable margin, finished tied for first place with Pilatus this year, with each delivering just 12 units in Q1 2017. Beechcraft’s deliveries were down from 26 in Q1 2016 (-53.9%), while Pilatus was down from 19 (-36.8%).
Also down for Q1 2017 were two other leading turboprop OEMs, Cessna and Piaggio. Indeed, third place in turboprop deliveries was a big surprise...
Quest reported nine deliveries for Q1 2017, up from five a year ago (+80%). Quest has been slowly gaining momentum over the years and now takes its place among the major turboprop builders.
Cessna came fourth with eight shipments, down from 12 a year ago; fifth was captured by Daher, with seven units (+40%) from five last year. Piper was sixth with four deliveries, up from two a year ago, followed by AVIC (two, up from none); Pacific Aero (one unit, level with last year’s Q1 report); and Piaggio, which had no deliveries, down from one in Q1 2016.
Turboprop results continue to be confused by GAMA’s unwillingness to segment the agricultural aircraft. These had a strong Q1, with Air Tractor reporting 28.6% more deliveries than last year. Thrush was level with last year’s result.
So the strength of the agricultural market masked traditional corporate turboprop market weakness. Single engine corporate turboprops accounted for 41 units in Q1 2017, down from 44 last year, but the real weakness was in twin turboprops, which totaled 14 units, down 48.2% from Q1 2016 when it had 27.
Collectively, including both twins and singles, the traditional business turboprop market was down 22.5% in Q1 2017 versus Q1 2016.
Piston Aircraft Highlights
Piston aircraft sales are actually doing pretty well in the context of overall piston deliveries across the past decade. The 203 units delivered in Q1 2017 is actually the third best since 2008, being surpassed only by the 209 recorded in Q1 2013 and the 241 that came the following year.
Piston sales were quite a bit stronger in the first years of the century, with deliveries in the 300-399 range for all the years except for 2005-2007 when they reached 439, 600 and 554 respectively. By 2009 piston deliveries had mostly fallen below the 200-unit mark, reaching a low of 166 in Q1 2010, so this year’s total looks pretty good.
Results in the piston market were evenly distributed, with five of the 14 OEMs reporting increased sales, five reporting a decrease and four with results that matched their 2017 and 2016 Q1 totals.
The leader in Q1 2017 piston sales is Cirrus, with 57 – matching last year’s Q1 haul. In a somewhat distant second place is Cessna, with 41 units. Nevertheless, that represents a 51.9% increase over the 27 units Cessna delivered in Q1 2016.
In third place is Italian OEM Tecnam, which delivered 19 single-engine piston aircraft in Q1 2017, up from 18 last year. In fourth place – and closely challenging Tecnam – is Piper with 17 units (down from 19 last year). Diamond was fifth with 11 deliveries, down from 20.
The piston twin market was up 12.5%, with 27 units in Q1 2017 compared with 24 last year. Twin piston manufacturers included Diamond (10 units), Tecnam (8), Beechcraft (5) and Piper (4). Interestingly, Diamond, Tecnam and Beechcraft all matched their last year totals, while Piper was ahead of its 2016 total when it reported just one delivery.
The relative strength of this past quarter (turboprop twins notwithstanding) is encouraging, although piston deliveries aren’t yet strong enough to be signaling an industry-wide turnaround.
It is evident that we are, at best, in the beginnings of a slow recovery that we can only hope will see jet sales rebound into the 800-unit-per-year range sometime in the near 2020s or perhaps even a little before. It would also be nice to see the turboprop segment recover some market strength. We’ll keep you posted…
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