GAMA released its first-quarter shipments and billings report for 2021, and it appears that the general aviation industry has recovered from the first-quarter dip in shipments and billings in 2020 as the global pandemic emerged in March. The second quarter will likely be more telling, however, as the industry delivered fewer planes in 2020 than 2019 due to factory closures and supply chain disruptions at the peak of the pandemic in April, May, and June. Nonetheless, it appears that the industry has recovered to near-normal levels of production and deliveries in early 2021, which bodes well for profitability for airframe OEMs this year. The following table shows first-quarter aircraft deliveries and billings and compares 2019, 2020, and 2021. The industry has recovered quickly to 2019 production levels for fixed-wing aircraft but at slightly lower revenues in early 2021, while the helicopter market has a few fewer deliveries but similar revenues in 2021. Overall, given the impact of the pandemic, the recovery of the business aircraft market has been fairly rapid and positive, and 2021 has begun well for this segment. On a company-by-company basis, the transition from 2019 to 2021 shows that Bombardier has been gaining in both market share of deliveries and in revenues, while Textron has been hit the hardest of the major industry players by the pandemic. Gulfstream has remained as the #1 player in both aircraft and revenue market share throughout the period. The following chart shows the number of aircraft delivered by player: Textron is the leader in market share in terms of aircraft delivered but remains down considerably from its first-quarter 2019 delivery levels. Gulfstream has also retreated slightly, while Bombardier has remained steady among the three large players. Embraer has recovered to greater than 2019 levels, while Cirrus, Honda, and Pilatus still lag 2019 levels. Dassault reports only on a half-year basis, so we will need to wait a quarter to assess the impact on their operations. In terms of delivery market share, Textron remains atop the heap with more business jet deliveries than its competitors, as shown in the following table comparing 2019, 2020, and 2021 levels. Gulfstream remains a steady player, and Bombardier gained some footing in 1Q 2021. Graphically, the relative market shares are easier to see in terms of aircraft deliveries, as shown below: The following table shows dollar billings across all aircraft models, not simply business jets, for each of the business jet segment participants. The results show that the industry has recovered to 91.3% of 2019 levels through the 1st quarter. Gulfstream has retained its lead in revenue generation, but that Bombardier has begun to close the gap as the industry has recovered. Sales of the Global 7500 have buoyed the prospects at Bombardier, with the forthcoming G700 from Gulfstream and Falcon 10X from Dassault to increase competitive pressures at the top end of the market. While Textron leads in aircraft deliveries, it pales in relationship to Gulfstream and Bombardier in terms of revenues, as it primarily sells smaller and less costly aircraft. As a result, the market share pecking order changes when one looks at deliveries versus billings, as shown in the table below: In graphical form, the market share gains at Bombardier and drop at Textron from a billings standpoint stand out quite clearly: The increase in leisure charter traffic, a tightening used aircraft market, and a return of business travel all bode well for the industry. At the end of the second quarter, we’ll have a much better assessment of whether the industry has recovered, or still has a ways to go. All indications point to sales and billings returning to normal quickly in what appears to be a changing market. While we don’t know if the additional traffic will remain long-term and spur additional demand, we do know that initial indicators appear to be quite positive. We are optimistic that the industry has recovered and will continue that recovery through the remainder of 2021.
