Aviation, in its earnings announcement earlier this week, announced that it has suspended development on its largest aircraft, the Hemisphere. That aircraft was designed around the Silvercrest engine from SAFRAN aircraft engines, and its development has been delayed due to performance and reliability issues with that engine. During a conference call with analysts earlier this week, Textron CEO Scott Donnelly said “at this point we have basically suspended the program and are waiting to see how the engine plays out. And then, based on that, we’ll make our decisions and move forward knowing what the performance of the engine is.”

Earlier this year, with the Silvercrest engine resulted in Dassault taking the unusual action on cancelling the program, replacing it with the similar sized Falcon 6X with Canada engines.

Safran is in trouble with this engine, which is running a couple of years behind schedule and has gone “back to the drawing board” to solve performance issues. The Hemisphere program is their sole remaining customer, and this suspension is not a vote of confidence for Safran. We believe it is likely that Cessna will also cancel the program and replace it with a similar design with a different engine.

The Hemisphere was scheduled to be the flagship of the Cessna fleet in the large jet category, with a three section luxury interior, as shown below.

This isn’t the first time Cessna has announced and later cancelled a program in the business jet market. In 2009, after the industry downturn, Cessna cancelled plans for its super mid-size Citation Columbus aircraft, which was designed around the PW810 engine and also would have been the largest aircraft in its portfolio at the time.  Ironically, should Cessna re-introduce the Hemisphere with new engines, Pratt & Whitney Canada are the most likely vendor, with their 800 series engines powering the new Gulfstream 500 and 600 and the Falcon 6X.

The Bottom Line:
Cessna has an excellent track record in bringing new aircraft to market, and its last two programs, the Latitude, which is in service and Longitude, expected to be enter service this year, have been on schedule.

Having now twice cancelled or suspended programs at the top end of its market, Cessna is not helping its credibility with larger aircraft buyers, who already can choose from models from Bombardier, Dassault, Embraer and Gulfstream. Cessna’s upward movement is into a very competitive market. If Cessna decides to continue the Hemisphere or a similar program, it will need to flawlessly execute, and quickly redirect customers to a replacement model to maintain their deposits and loyalty.  Waiting for Safran may not be a wise option.

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