Why delivery milestones matter
Manufacturers have been celebrating a lot of delivery milestones last week. Bombardier delivered the 50th Global 7500; Gulfstream the 100th G500/G600 family jet; and Textron Aviation its 1,000th 560XL jet series (Cessna Citation Excel, Cessna Citation XLS and Cessna Citation XLS+ models). The G500 only entered service in September 2018 and the G600 in August 2019. The first Global 7500 was delivered in December 2018.
Delivery announcements are more than just a chance to issue a press release. Reaching 50 or more deliveries reassures potential customers that the aircraft is a success.
“When I was selling new Hawkers, there were major flight departments that had arbitrary numbers of 50 to 100 units before they wanted to buy,” says Mike McCracken, of Hawkeye Aircraft Acquisitions. “Many of them threw that out the window when new models from a trusted OEM would come out lowering that to as few as 25 and after.”
But a significant number still hold on. Delivery milestones are a good way of highlighting the popularity of an aircraft. No one wants to end up with a niche aircraft like the innovative SyberJet SJ30 which had just four customer deliveries. Once an aircraft type gets past 50 deliveries, owners can feel more confident that it will be supported – even if the manufacturer stops building them.
Gulfstream last week highlighted its support of its G280 following an article saying it was no longer committed to the type. With 212 G280s delivered – and a significant number owned by buyers of other Gulfstream aircraft – its commitment to the model was never in doubt.
A large fleet also gives buyers confidence that independent maintenance companies will keep supporting the fleet.
‘A better predictor than pure numbers’
“From a support side, at least 50 to 100 deliveries indicates that there are enough units that if the model becomes a stepchild, someone other than the OEM will pick up the slack and see money in supporting them,” says Mike McCracken. “OEM reputation and how the plane fits in with their overall strategy, commonality with other makes and models within the OEM family might be a better predictor than pure numbers.”
Hawker Beechcraft delivered 70 Hawker 4000s before stopping production. But this was enough for the aircraft to be well supported – at least in the US.
“Another factor is common engine types and avionics helps with the support as those are big drivers,” says McCracken. “With the Hawker 4000, the engines and avionics are minor variations away from common platforms. That just leaves an enterprising third-party vendor to work on the items that are particular to the 4000 – which there are many – to find their own overhaul and replacement plans.”
“Clearly we have seen that many other well qualified third party MRO facilities are quite capable of providing quality care and feeding of legacy product independent of numbers in service,” says Peter Menza, vice president of Client Services and Acquisitions, Global Aviation.
“Educated buyers in the pre-owned market always explore support options. Those that don’t usually pay a price downstream.”
‘Clear patterns emerge’
Long manufacturing runs are obviously good for manufacturers. “Looking back over the past 60 years of business jet production, there are some clear patterns that emerge,” says Rollie Vincent, creator, JETNETiQ.
“A production run of seven to eight years is fairly common; by then, we would look for a model to be substantially refreshed. Production of two to three aircraft per month at a sustained rate (or higher) for three to four years builds up to a fleet of at least 100 aircraft as a minimum,” says Vincent. “Success comes with the second and subsequent iterations of a model, beyond the initial warranty period, when ROI payback begins and product support is tested.”
Once an aircraft type gets past 1,000 deliveries, manufacturers clearly have a winner. It also gives the aircraft the recognition it deserves. “The XL family is without doubt one of the most under-appreciated aircraft in the market and it really is a star,” says Oliver Stone, MD of Colibri Aircraft. “It has a great cabin that sells itself and is great performer that can do 85% of what most buyers need. It is also a brilliant introduction to business aviation for so many first-time owners.”
Owners of Citation XLs have no concerns about finding future buyers or support. “Every two minutes, a 560XL jet takes off or lands somewhere in the world,” said Lannie O’Bannion, senior vice president, Global Sales and Flight Operations.
As the XL family shows, the market is usually the best judge of an aircraft. “Just like all products, it really comes down to if the marketplace likes the plane and there is a niche for that product,” says McCracken. “If you build a good mousetrap, the mousetrap catches mice. And then you should be able to sell your share of mousetraps.”
Textron Aviation marked last week the delivery of the 600th aircraft from the Cessna Citation CJ3 range.
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