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Business Aircraft Orders Will be Slow

 By Robert Wall

Washington 

 

 
 An abundance of used aircraft for sale and a continuing trickle of order cancellations are driving expectations that business aircraft orders will not see a marked recovery for some time, although several manufacturers expect financial performance to at least bottom out, or even start improving.

The situation was clearly illustrated in Dassault’s latest update on the market situation, released last week. The aircraft maker suffered a huge number of cancellations, with a net loss of 98 orders for the year. The company had a positive order intake of 92 units in 2008, and 203 Falcons were ordered in the prior year. Some late cancellations in 2009 also left the company stranded with some white tails, including a few of the flagship Falcon 7Xs.

On top of that, Dassault is the latest of several producers to report large cancellations from NetJets, the giant U.S. fractional ownership business which suffered a $711-million loss last year. All order book positions after 2014—a total of 65 units—have been canceled.

Hawker Beechcraft also suffered a 55% drop in its order book last year, largely owing to NetJets cancellations, and Cessna Aircraft saw its backlog drop 66% last year as well.

But Dassault officials signal they are not overly concerned by the actions NetJets has taken. The orders are expected to return once the business aviation markets rebound, company officials say, citing positive feedback received from NetJets’ new chief executive, David Sokol, who has focused on reducing his company’s debt exposure and positioned it to become profitable again in 2010.

Although Dassault curtailed production last year—including furloughs in France and a 20% reduction in headcount at Dassault Falcon Jet in the U.S.—business jet output still reached a new record at 77 units in 2009, although that is far below the 120 once projected and the 90-unit expectation set a year ago. Dassault Chairman/CEO Charles Edelstenne believes revenue will be roughly flat for 2010; 2009 results came in at €3.4 billion, €320 million below the 2008 level. Deliveries in 2010 are expected to reach about 80 units, including around 25-30 Falcon 7Xs, says Olivier Villa, Dassault’s senior vice president for civil aircraft.
 
READ MORE:    AviationWeek 
Last Updated on Sunday, 21 March 2010 01:43  
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