Textron Aviation is continuing to work on raising production rates as demand remains robust, despite war in Ukraine, a volatile stock market and inflation, its top executive says.
“Of course, we’re watching that as everybody is,” Ron Draper, Textron Aviation president and CEO, told media during a pre-EBACE briefing. “Every day, the stock market is a surprise… It hasn’t affected conversations or demand. We’re still taking lots of orders. We’ve announced fleet orders. We’re in discussions with others on multi-aircraft orders. So, the market’s still strong and growing.”
The company’s order backlog at the end of March 2022 totaled $5.1 billion, up $1 billion from a year ago. It is a backlog that is allowing for “stability in production, stability in pricing, opportunities for customers to plan replacements and pace the supply chain hiring needs according to the market,” Draper says.
“We continue to see the market growing,” he says. “Its expanding in all segments. And we’re seeing people coming into the market from fractionals and charters to whole aircraft ownership in piston market, in turboprops and in jets we’re seeing concept customers stepping into whole aircraft ownership across our product portfolio… Some of our partners and fleet operators (are) stepping up for more and more purchases of aircraft.”
Flight activity continues to be strong at rates higher than pre-pandemic levels, he says, with activity reaching the largest year-over-year increase in February.
“Customers are flying more than they ever have before in recent times,” Draper says, reporting that activity is up in every region of the world.
And “that’s exciting news,” he says. “One of the strongest increases year-over-year is in Europe as the rest of the world recovers from COVID or gets back to work and flying activities are really picking up. That’s good for the industry; that’s good for us from a service and an aircraft production standpoint.”
The preowned market is in “uncharted waters” with record low amounts of inventory for sale, he says.
“That’s good if you own an airplane today, your values are up substantially, and so our customers are happy with that,” Draper says.
At the same time, the company is investing in its products.
“We’ve continued to do that over the years and it’s yielding great results for us,” he says. In the last 10 years, the company has introduced more than 15 clean-sheet or upgraded products.
At the same time, Textron Aviation has felt minimal impact from sanctions put on Russia following its invasion of Ukraine.
“I think we had in our backlog five small aircraft of Caravans down into pistons that were sold to Russia that we’re unable to deliver to Russia,” Draper said. “There’s very minimal parts sales that were going to airplanes that are owned by Russian entities that we can no longer sell to, but it’s really not material for us.”
Textron Aviation does not work with Russian suppliers, so it also did not impact the company’s direct supply chain. It has had a second or third tier supplier impacted by the sanctions, a move the company is working through, he says.
As EBACE prepares to open, Textron Aviation notes that more than 1,800 of its turbine aircraft are in service in the European region.
“We are thrilled to be back at EBACE,” Draper says. “It’s great to be back with customers.”
Textron Aviation plans to showcase five aircraft at the Geneva show, including EBACE debuts of its Citation CJ4 Gen2, Citation XLS Gen2 and Beechcraft King Air 360. It also will display its Citation Longitude and Citation Latitude at the static display. A Bell 429 helicopter will also be exhibited.
In addition, the company will highlight its aftermarket products and services at its exhibit at the Palexpo Convention Center. Its aircraft will fly to the show on sustainable aviation fuel (SAF).
As its order book grows, so does Textron Aviation’s expansion of service capabilities. It currently is adding a 4,000-ft.2 addition at its Dusseldorf, Germany, service center facility with space dedicated to increased parts inventory, Draper says. It also is adding a mobile service unit in Madrid.
In May, Textron Aviation delivered the first SkyCourier turboprop to a customer, following FAA certification in March. The year so far has also brought certification and delivery of the Citation XLS Gen2 and Citation M2 Gen 2. The Beechcraft Denali turboprop marked its first flight last November.
As it looks to the future, Textron Aviation is using a three-phase approach to sustainability.
One is in energy consumption. Nearly all of the energy consumed at its Kansas facilities come from sustainable sources, with nearly 80% of its North American energy coming obtained through sustainable wind energy.
In addition, all its jets are capable of running on SAF, something that its Wichita campus keeps on hand for customers. Lastly, the third element is in the design of future products and how to make them more sustainable.
“That may be everything from current propulsion sources; how do we make those engines more fuel friendly,” Draper says, such as the Catalyst engine for the Beechcraft Denali. The engine is 20% more efficient than the current offerings.
In addition, the company is focused on designing interiors from sustainable sources. Its Citation XLS on display at EBACE features an interior using materials from sustainable sources. It’s a customer choice, Draper says.
Lastly, the company has set up a Wichita-based division called eAviation to invest in future designs using alternate sources of propulsion and new technologies. In May, it acquired Pipistrel, based in Slovenia. Pipistrel’s Velis Electro is the first and to date, only, electric aircraft to receive full type certification from EASA.
Meanwhile, Draper says the U.S. pilot shortage is yet to affect the company directly. Textron Aviation employs about 120 pilots within the company and has little turnover.
“Now, some of our customers might have a little bit of trouble getting a second pilot or a third pilot for their flight department or something,” he says. “But the business aviation world doesn’t deal with the numbers like the airlines. Some of our customers that are larger, like Wheels Up or NetJets that have hundreds and hundreds of pilots. And you see them advertising quite a bit out there and offering incentives, etc., to attract pilots into their space.”
In some cases, the shortage has been a benefit to the company, because it is selling Cessna 172 trainers to flight schools around the world, where they are “scrambling to produce more pilots,” he says.
Related Content
