Last week, the National Business Aircraft Association held its annual convention in Orlando, with the business aviation community leaders updating the industry on what’s new. We came away from NBAA 2018 with a feeling of cautious optimism. While the business aviation segment is growing again, the segment still hasn’t recovered to pre-2008 and great recession levels. The key players are optimistic that the industry will recover slowly over the next decade, but are carefully matching capacity to fall between provable backlogs and expected demand. Most demand forecasts, whether from AirInsight Research, Aviation Week, or Honeywell, tend to be on the conservative side. The mix of aircraft appears to be moving upward to larger aircraft, and the OEMs are offering new models to capture additional demand. Let’s take a look at developments on a manufacturer by manufacturer basis. Aerion Aerion announced that is has begun preliminary design of its 12-seat AS2 Mach 1.4 business jet, and announced its engine choice, the GE Affinity engine at NBAA. The aircraft is expected to fly in 2023 and achieve certification in 2025. Honeywell, along with GE and Lockheed Martin, is a strategic partner for the program, and plans to develop its Primus Epic for the AS2 with optimized flight profiles to minimize sonic boom and maximize Mach cut-off. While still funded by its founder, Aerion has developed strategic alliances with several key industry players. Bombardier The high end of the market is continuing to move forward. Bombardier obtained certification for the Global 7500 and is making considerable progress with its Global 5500 and 6500 aircraft that were announced earlier this year at EBACE. The message from Montréal is that the business aircraft division is on-target for sales in the short-term and that its long-term projects are also on target. Bombardier also indicated that its Learjet models will continue to be produced at a rate of one per month, higher than expected. Bombardier and Gulfstream continue to play leapfrog at the top end of the business jet market, and Bombardier, with the Global 7500 approach entry into service, has made the last leap. Cessna The largest order of the show was a letter of intent from NetJets to acquire up to 175 Citation Longitude models and up to 150 of the new Citation Hemisphere model. The latter is interesting, as the program is currently suspended until Safran can solve the problems with the compressor on the Silvercrest engine. Those problems and the resulting delays caused Dassault to cancel the 5X program and choose Pratt & Whitney Canada to power its 6X replacement. The move forward by Cessna provides an early indication of confidence in the Safran engine and an indication that Safran is making progress in solving its problems with the Silvercrest engine. Cessna also showed progress with the Denali, which will be powered by the GE Catalyst turboprop that offers more advanced technology than existing engines, and the Sky Courier, which was shown with a 19-seat passenger interior. The aircraft could find an interesting replacement for aging Twin-Otters and Beech 1900 in smaller markets throughout the world in addition to the large initial order from FedEx. While Textron stock may have fallen due to short-term deliveries and cash flows, the future backlog certainly looks bright. Daher Having introduced the TBM 910 and 930 variants last year, Daher announced no changes to its single-engine turboprop product line at NBAA but focused on its introduction into charter operations. Dassault After the cancellation of the 5X last year and replacement with the 6X, Dassault is making progress and is on-target for its planned 6X entry into service in 2022. Dassault also dropped hints that a new Falcon may be in the wings. Our sources indicate that a large intercontinental twin based on a stretched 6X fuselage is likely. Dassault, with its experience with supersonic military jets, including the Rafale, should have a leg-up on supersonic business jet development. Embraer Embraer announced two new models, the Praetor 500 and 600 which are derived from the Legacy 450 and 500 series of aircraft. Moving to full fly-by-wire systems enabled the aircraft to lose enough weight to add fuel tanks and significantly improve range. Embraer’s product line refresh should breathe new life into the mid and super-midsize offerings in its portfolio. GE With the introduction of the Affinity engine family for supersonic applications, GE has clearly put a stake into the ground as the player to beat in the emerging supersonic market. The affinity engine, based on the proven CFM-56 core, has a thrust rating of 16,000 to 20,000 lbs. Gulfstream Gulfstream entered NBAA with essentially the same lineup as last year but has been quiet on new development programs. The G500 was certified in July, and the G600 is on the final stages of testing for its certification by year-end. We expect the announcement of a new program to occur perhaps as soon as EBACE next spring as the game of “leapfrog” continues at the top end of the market. Honda Honda has begun delivery of the Honda Jet Elite model, which offers increased range, lower noise, shorter takeoff field length, increased MTOW, and avionics improvements. The company has also formed the Advanced Performance Modification Group to offer upgrades to existing operators. The first upgrade package, priced at $250.000, provides a shorter take-off field length, 100 pounds MTOW improvement, an upgrade to the G3000 avionics suite, and a range increase between 100-120 nautical miles. Pilatus The PC-24 has entered service and 23 deliveries are expected by year-end. Pilatus is ramping up production to 40 in 2019 and 50 in 2020 to meet its substantial backlog. This airplane earned high differentiation in AirInsight Research’s productivity index as a strong value. Pratt & Whitney Canada PWC continues to be the market leader in turboprops with the PT6 and remains busy with EIS for the Gulfstream 500, forthcoming Gulfstream 600, and development of the Dassault Falcon 6X. Rolls-Royce Rolls-Royce, having introduced the Pearl engine for the Global 5500 and 6500 at EBACE, has already completed 2,600 hours and more than 10,000 cycles of testing on the Pearl 15 engine, which is expected to be enter service late next year. The Bottom Line Progress for business aircraft OEMs continued on all fronts, with the major airframe and engine players all on target with their current development programs. While most participants are optimistic, an air of cautiousness remains, indicating that a strong uptick and any hope of a return to pre-2008 growth levels is not expected. Industry players have adjusted to the post-2008 era of slower growth and modest recovery. While some indicators, including used inventories, are closing in on historic levels, the industry remains cautiously optimistic.
