Cessna slows light jet production after poor first quarter

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Textron, the owner of Bell Helicopters and Cessna Aircraft Company, has said it is slowing down production of Cessna’s line of light jets, including the Citation Mustang, due to a lack of demand in the first quarter of 2013.

Textron is slowing down production of Cessna’s line of light jets, including the Citation Mustang, due to a lack of demand in the first quarter of 2013.

Cessna delivered 32 new jets the first three months of this year, down from 38 a year ago, which led to a loss in the quarter of $8 million. Despite this, revenues were up $39 million from 2012’s first quarter, mainly because of an $81 million increase in pre-owned aircraft sales.

“Looking forward, given the lack of recovery in the business jet market, we’re reducing our 2013 business jet delivery outlook and now expect that deliveries will be down this year compared to 2012,” said Scott Donnelly, chairman and CEO of Textron, which owns Bell Helicopters and Cessna Aircraft Company.

“Accordingly, we are adjusting our production schedules and implementing other appropriate cost actions at Cessna. In addition, we have initiated a salary workforce reduction program, the largest portion of which is a voluntary separation plan,” added Donnelly.

Cessna delivered a total of 181 business jets in 2011 – down from 183 in 2011. It delivered 38 Mustangs in 2012, the lowest number since the jet entered service in 2006.

Cessna light jet deliveries

Source: GAMA and Corporate Jet Investor

When asked what aircraft types could expect to see a further decline in delivery numbers, Donnelly said it would apply specially to Mustang, as well as the Citation CJ2, CJ3 and CJ4.

“We were hopeful that demand would recover as the impact of last year’s election and fiscal uncertainties were behind us,” said Donnelly. “We also thought the recent strength in US equity markets would have supported improved business confidence and therefore, business jet demand.”

Donnelly also said that Cessna had sold the last five Citation Sovereigns from its original production line. The company hopes to deliver New Sovereigns with a longer range, new avionics, auto throttles, winglets and new cabin management system later in the year.

“The market behaviour in that medium segment has been more consistent with our expectations, whereas the light side has been weaker,” said Donnelly.

Textron were far more optimistic about Bell, as the manufacturer delivered 40 commercial helicopters in the first quarter of 2013, up from 30 in the same period of last year. Donnelly also noted the company had a positive showing at this year’s Heli-Expo event in Nevada, after announcing the Bell 412 EPI and the Bell 407 GT.

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