By Robert Wall
GENEVA--Private plane makers such as Textron Inc. and General
Dynamics Corp. are among companies sticking to delivery plans for
this year, as they lean on buoyant U.S. jet demand to offset
weakness in some global markets that last week caused Bombardier
Inc. to announce 1,750 job cuts.
Bombardier warned that weakness in Russia, China and Latin
America had reduced appetite for its Global 5000 and 6000 jets, its
most expensive long-range business jets in serial production. To
offset the lower volume the company said it would cut jobs and
build fewer planes.
Larry Flynn, president of Gulfstream, the General Dynamics
plane-making unit, on Monday acknowledged that business activities
in Russia and China had slowed, but added that demand in
neighboring countries has been strong. "All in all we are off to a
great start this year," Mr. Flynn told reporters at the European
Business Aviation Convention and Exhibition.
The company has a backlog of planes to be built, valued around
$13 billion, he said, and expects to deliver more planes this year
than last. Gulfstream, which has about half its sales in the U.S.,
competes with Bombardier at the top end of purpose built business
jets.
Eric Trappier, chairman of France's Dassault Aviation SA said
there are no signs business in Russia, China or South America is
picking up, though the situation also appears not to be further
deteriorating. The U.S. market is strong, he said.
Executives for Brazilian plane maker Embraer SA also point to
the U.S. market as one of the few bright spots. The company this
year plans to ship slightly more business jets than in 2014,
largely owing to deliveries to U.S. customers,
The economic downturn in Russia from economic sanctions imposed
after the country's invasion of Crimea may even prove a boon to
some plane makers. Russian demand has long focused on some of the
most capable and pricey planes.
Kriya Shortt, Textron Aviation's senior vice president for sales
and marketing said demand in Russia for its planes has been rising.
"People are starting to get the idea of rational consumption," she
said, with buyers not necessarily opting for the larger, more
expensive planes they once favored and instead buying smaller
models that still meet their needs.
Textron plans to delivery incrementally more business aircraft
this year than last, said Scott Ernest, president and chief
executive of Textron Aviation. "At this point in time we are
continuing with our production plans and feel comfortable the
prospect activities will allow us to meet the expectations we would
have for the year," he said at the event.
Market volatility isn't slowing most plane makers appetite to
work on new models. Textron this month expects the U.S. Federal
Aviation Administration to give its approval to the company's
newest business jet, the Latitude plane that retails for around
$16.3 million, Mr. Ernest said. The company also has 500 engineers
working on its new Latitude jet due for its first flight next
year.
Gulfstream is working on several new planes and this quarter
expects to fly for the first time its G500 jet that can span 5,000
nautical miles. The aircraft is due for customer deliveries from
2018. Dassault Aviation has two new planes in development. The
timing of its Falcon 5X, which was due for delivery in 2017, is
uncertain, though, because of problems with the engine being
developed by Safran SA's Snecma unit, Mr. Trappier said.
Write to Robert Wall at robert.wall@wsj.com
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