FT SPECIAL REPORT Corporate Aviation Tuesday November 17 2015 www.ft.com/reports | @ftreports Inside Helicopters: need for Industry outlook remains cloudy speed is overtaken Manufacturers should be used to ups and Manufacturers’ “There’s still an intra-continental requirementforsomeusers,”MrAnder- downs conflicting messages son says. “North American users who Page 2 reflect mixed fortunes, still have local requirements can very well utilise the midsize and light jet air- Embraer reports Robert Wright craft.” How the Brazilian The smallest light-jet segment, which wasonceexpectedtoboomasaseriesof aircraft maker turned a or anyone seeking to under- manufacturers launched very cheap dream into reality stand the state of the business models, looks set to remain a modest Page 3 jet market, the three weeks at part of the market. JetCraft says very the end of April and start of light, light and superlight jets will F Maywereaconfusingtime. account for only $25bn of the $271bn On April 29, Phebe Novakovic, chief revenuethatitprojectstheindustrywill executive of General Dynamics, earnfromnewjetsuptotheendof2024. expressed cautious but unmistakable Alain Bellemare, Bombardier’s chief optimism about prospects for the US executive, cited the “very soft” market aerospace and defence company’s Gulf- for smaller jets as the reason for cancel- streambusinessjetoperationasshedis- ling the midsize Learjet 85 programme cusseditsfirst-quarterresults. altogether,after the project was initially “We always pull production down in putonholdinJanuary. Large-cabin aircraft the face of weak orders,” she said. “We The whole industry’s prospects, Gulfstream leaves havenointentionofdoingsothisyear.” meanwhile, have been further clouded competitors in its wake On May 14, however, Canada’s Bom- by the sharp falls in the price of oil and bardier, which in January had stopped other commodities, and the poor per- at the top of the range workonitsnewLearjet85corporatejet, formance of European and emerging for size and price made it clear Ms Novakovic’s optimism market economies that had produced Page 3 was not universally shared. Weak manyoftheindustry’srecentorders. demandwasforcingittocutproduction ScottDonnelly,chiefexecutiveofTex- Technology: Ubers of of its biggest, most expensive aircraft — tron, Cessna’s parent, told investors theGlobal5000andGlobal6000. during the third-quarter earnings call skies bid for market “We have seen an industry-wide soft- Mixed picture: the market for large jets has been strong but a recovery in midsize aircraft is more fragile — Patrick Lynch/Alamy that he was “reasonably happy” with Online operators make ness in demand recently in certain theUSmarketforbusinessjets. point of price as well as international markets and are taking 722 delivered in 2014 and highlights from 117 last year. Bombardier’s pro- required a lot more capable aeroplanes But he went on: “There’s no question steps to adjust our production accord- how far the industry is from again hit- duction of its flagship Global 5000 and intermsofrangerequirements.” that the markets in Europe and Asia are convenience ingly,”ÉricMartel,thethenpresidentof tingtherecord1,318deliveredin2008. 6000issettofallto68,from80in2014. It is less clear, however, whether a challenged.Ithinkpartofthatisjustthe Page 4 BombardierBusinessAircraft,said. Thepicturehasalsobeendifferentfor Chad Anderson, president of JetCraft, recovery in midsize jets — anticipated economies are in a pretty difficult spot. The conflicting messages partly companies serving different parts of the a North Carolina-based private jet bro- since demand collapsed during the eco- Of course, the US dollar being quite Flight tests and reflect how mixed 2015 has been for world and in different size categories. ker, says the strength in big aircraft nomiccrisisin2008—willbesustained, strongputssomeadditionalpressureon business aircraft makers. Teal Group, a Deliveries at the top end of the size reflects the growing number of compa- evenifthereareoptimisticsigns.Cessna thatintermsofalltheproductlines.” industry overview Virginia-based aerospace consultancy, range have held remarkably steady nies that need long-range, fast jets to is due to deliver 170 aircraft this year in Yetanimportantdynamicinthemar- For aircraft tests, videos predicts that 713 business jets will be throughout the economic downturn. visitlocationsacrosstheglobe. its midsize Citation range, up 7 per cent ket, one critical in understanding Bom- and comment, go to delivered during 2015. Although the fig- Gulfstream is projected this year to “More often than not, our clients’ on 2014. That segment has benefited bardier’s take on market conditions, ure is an improvement on the 672 deliv- deliver 115 of its largest-cabin jets — the business demands have globalised, not from robust economic recovery in the relates to the plight of Bombardier, www.ft.com/corporate- ered in 2012, it is a slight fall from the G450, G550 and G650 — down slightly shrunk,” Mr Anderson says. “That has US,thebiggestmarketforbusinessjets. Continuedonpage2 aviation 2 ★ FINANCIALTIMES Tuesday 17 November 2015 Corporate Aviation Need for speed overtaken by harsh economic lessons Industry outlook Helicopters market overall has fallen. “At the This resulted in a record top speed of some solution is engines and large pro- military S-97 Raider rotorcraft, which medium and heavy end it has had a sig- 255knots(293mph)—somewhatabove pellers on the end of wings. The engines had its maiden flight this year. This remains Manufacturers have been nificantimpact,”hesays. the theoretical top speed of a normal point up for vertical operations and tilt month the sale of Sikorsky by United However, he says manufacturers are helicopterofabout225kt. forward for cruise — yielding a speed of Technologies Corporation to the Lock- cloudy dogged by events out of nimbler than commercial plane makers Some of the lessons learned in the X3, about275kt. heed Martin aerospace company was their control in a turbulent at “cutting back production to mirror now retired and on display at the Musée The civil version of the tilt-rotor, the confirmed — and Lockheed’s mainly market, reports Rohit Jaggi whattheyseeasforwarddemand”. de l’Air et de l’Espace at Paris-Le Bour- nine-passenger AW609 being devel- defence focus is unlikely to mean there The manufacturers are pressing get, are promised for future Airbus oped solely by AgustaWestland after willbeapushforacivilversion. Continuedfrompage1 ahead with a number of projects that models. In the meantime, the 12-pas- Bell all but stepped out of the project, Away from the speed race, Bell Heli- which manufactures more business jets Helicopter manufacturers should be have a common theme of increased effi- senger H160 uses a fenestron tail-rotor remaining only as a contractor, had copter is pushing efficiency as the key than any other and is projected to have used to ups and downs. But they have ciency and usability. They have also tilted from the vertical, claiming vari- weathered a number of delays but was attributeofits525Relentless,whichhas 32.2 per cent of the market this year by had a number of events to contend with beentestingtheedgesofthespeedenve- ous benefits including sapping less ontrackforcertificationin2017. ticked up more than 50 orders and is set revenue. recently that have been completely out- lope — to push speed limits on conven- power. The H160, scheduled for certifi- However,at the end of October,a pro- forcertificationin2017. The company faces a serious corpo- sidetheircontrol. tionalrotorcraftthatareslowerthanfor cation in 2018, has achieved 176kt and totype crashed near the factory in Italy, Bell, part of Textron, is also fighting ratecrisisasitstrugglestofundthecosts The previously high price of oil, mak- fixed-wingaircraft. has as its target cruise speed a rapid — killing the test pilots. An accident inves- back in the very light sector. “The R66 — $5.4bn so far — of developing its C ing more remote fields economical to Airbus Helicopters came up with one forhelicopters—160kt. tigation will determine whether there is from Robinson became the market Series commercial jet, a competitor to explore,bolsteredsales—alongwiththe of the more elegant — and evolutionary The design of another model, the X6 likelytobeafurtherdelay. leader in the under-$1m market,” says Airbus’sA320familyandBoeing’s737. growing wind energy industry, which — systems with the experimental X3 heavy helicopter, will be finalised over The crash is a reminder of the trou- Dominic Perry, news editor at Flight Richard Aboulafia, an analyst at Teal also requires helicopters for inspection whenthecompanywasstillcalledEuro- the next two years and is intended to bled gestation of the V-22, which con- International, part of information pro- Group, says the crisis — which pushed andmaintenance. copter. enterserviceinthe2020s. sumed more time, money and aircraft vider RELX Group. “But Bell has come net debt up to $6.8bn at the end of the The plunge in the oil price, however, That aircraft did away with the pow- There has been some rationalisation thanplanned.ButordersfortheAW609 back with the 505 Jetranger X.” First third quarter — prompted Bombardier put a damper on more adventurous er-sapping anti-torque rotor at the end oftherange,though.AirbusHelicopters continue to be added, even since the deliveriesareexpectedbymid-2016. to increase Global 5000 and 6000 pro- exploration plans — including some of of the tail boom and instead used two isdroppingtheAS355lighttwin. crash. Economy of operation