The math(s) of aircraft manufacturing: Third quarter 2018 review
After the hyperbole of a tradeshow, it can be refreshing to look at some hard facts. So here are how OEMs have done delivering and selling aircraft so far in 2018:
- Bombardier: Delivered 96 jets in the first nine months of 2018 – the same as in the same period of 2017. This is more than 70% of its planned deliveries for 2018. Third-quarter backlog: $14.3 billion up $200 million at the end of June.
- Dassault: Delivered 15 Falcon jets in the first six months of 2018, compared with 17 in the first six months of 2017. It delivered 49 Falcon jets in 2017. Dassault sold 18 Falcon jets in the first six months of 2018 compared with 14 in the same period of 2017. Half-year backlog: 222 billion ($1.39 billion) – or 55 aircraft – up Eu200 million from Eu1.022 billion (60 Falcons) in June 2017.
- Embraer: Delivered 55 jets in the first nine months of 2018, compared with 59 jets in the same period of 2017. In 2017, it delivered a total of 109 executive jets and it has given guidance of between 105 and 125 executive jets in 2018.
- Gulfstream: Delivered 79 jets in the first nine months of 2018, compared with 90 for the same period in 2017. In 2017 it delivered 120 aircraft in total. Third quarter backlog: $11.869 billion (down $475 million from $12.344 billion in June)
- Textron Aviation delivered 125 jets in the first three quarters of 2018, three aircraft up on 2017. It also delivered 119 turboprops, up nine on the same period of 2017. Third quarter backlog: $1.8 billion up $200 million from $1.6 billion in June.
Gulfstream’s figures are a slight anomaly. The OEM has been hit by problems with NORDAM producing nacelles for its G500 aircraft. It has solved this by buying the nacelle-maker’s factory. “I am always more comfortable when I can control my own destiny,” said Phebe Novakovic, chairman and CEO, General Dynamics on a conference call this week.Gulfstream is hoping to deliver between eight and 10 G500s in the last quarter (adding to the two it has already given to customers). Novakovic says that potential buyers have been put off buying G500s because of uncertainty about delivery dates.
The key take-away is that the fall in the number of pre-owned aircraft (particularly pre-owned aircraft below five years old) has not resulted in orders for new aircraft. Manufacturers are typically getting one sale for every aircraft they deliver (a book-to-build ratio of one). Backlogs are gradually rising but have not suddenly jumped.
The figures are also a great guide to how enjoyable the holiday period will be for different OEMs. Some still have a very busy few weeks ahead.