Gulfstream: Large aircraft demand strong
Speaking at a Morgan Stanley investor conference, Jay Johnson, chairman and chief executive officer of Gulfstream’s parent company, General Dynamics, said that demand for large cabin jets was strong and that, although it had still not returned in the mid-cabin market there were signs of increased activity.
Johnson said that Gulfstream still has over 190 orders for its new G650 aircraft, which is on track to be in operation by 2012.
“We are seeing some return activity in the mid-cabin market,” said Johnson. “It is not back. It is not where it needs to be. It is not where it will be. We are seeing not only what I would call tyre-kickers, but we are also seeing order book activity at a modest but encouraging level in the mid-cabin market.”
He said that the order backlog for both of Gulfstream’s large cabin aircraft is about 18 months. “That is about where we want to be. Any less than that and we have got work to do. Any longer and the customers start getting antsy about getting their airplanes so we are in good shape on large cabin.”
Speaking at the Morgan Stanley Global Industries Unplugged Conference, Johnson made the following comments:
“The G650 is not quite 1/3 way through test. Aircraft did magnificently. Flying at Mach 0.995 is a bit of a gee-whiz moment. What is more significant is that we are seeing in tests that the aircraft is flying virtually exactly where we thought it would be in tests. The G250 is doing the same thing in Israel. Flight test performance on G250 is doing really”
“G650 have just under 200 aircraft in backlog. That number is floating up and down a bit – I mean onesies and twosies. We see a couple drop-out then a couple drop-in.but is essentially in the 190 to 200 range. Steady as she goes.”
“Scheduled to deliver 17 G650s in 2012, 33 aircraft in 2013, 13 aircraft in 2014.”
Large cabin market – G450 and G550
“In the large cabin market, backlog is roughly 18 months for both aircraft. There are a couple of holes here and there but it moves around. That is about where we want to be. Any less than that and we have got work to do. Any longer and the customers start getting antsy about getting there airplanes so we are in good shape on large cabin.”
Mid cabin market – G150, G300s and G250
“We are actually seeing mid-cabin activity. Not robust – I would not categorise it as that – but that market is beginning to stabilise and the activity level has definitely increased for us in both existing product – 150 and 200s – and new product with the 250.”
“While there is caution and issues with inventory – particularly in the mid-cabin market, and absorbing and determining what the new normal is and all those things we talk about. In spite of caution there is still activity coming back which is encouraging.”