Delivery rise masks fall in billings
A few more sales, but lower revenues. That was the overall story for business jets last year. The number of deliveries rose by a pedestrian 1.3% year-on-year in 2017 — just nine more aircraft. But whilst an increase in total deliveries is always welcome news, billings in US dollars decreased by 3.9%. In other words, on average and taken as a whole, the industry was selling jets at lower prices.
In fact, had it not been for two relatively new aircraft from newcomers ramping up their sales efforts, overall sales volumes and revenues might both have been lower.
Honda delivered its first two HondaJets right at the end of 2015. The following year saw a production ramp up, and it finished 2016 having delivered 24 aircraft. In 2017 Honda almost doubled its deliveries to 42 aircraft.
For the Cirrus SF50, the initial set of three deliveries took place in the final quarter of 2016. Last year was the first full year of deliveries, with 22 new aircraft going to new owners.
Overall, deliveries of Very Light Jets jumped up by more than 75%. Without the HondaJet and SF50, deliveries would have fallen by 8.3%.
It could be easy to jump to conclusions and say that we are seeing a shift towards smaller aircraft. But it would not necessarily be true. We are now effectively in a lull between periods, waiting for the next set of new aircraft to be delivered.
Airbus did not deliver any ACJs during the year, and Boeing did not deliver any BBJs. Gulfstream’s G450 and G550 deliveries have slowed over the past two years, as have Bombardier Global family deliveries.
But all those manufacturers have replacement aircraft waiting in the wings, with most due to start being delivered this year. They are all larger aircraft with greater cabin spaces, and their deliveries should swing the balance towards higher average delivered prices. Finally, among the newcomers to the runways this year, we shall see the Pilatus PC-24, which has just received its certifications from the FAA in the US and from the EASA in Europe, on the other side of the big pond.
Have a great weekend,
NOTE: The below originally appeared as the editorial in our November 17 One Minute Week newsletter. To find out more, and sign up for free, please click here.