GA Shipments Declining, Cause of Worry

The General Aviation Manufacturers Association (GAMA) has released the 2015 worldwide year-end aircraft shipment and billing numbers and also the first quarter and first half of 2016 shipments, all of which indicate a decline but are hopeful that the situation would improve soon. GAMA is an international trade association representing over 80 of the world’s leading manufacturers of general aviation airplanes and rotorcraft, engines, avionics, components and related services.

Similarly, Honeywell Aerospace, Embraer and JetNetiQ in their respective forecasts affirmed that 2016 would be a period of sluggish growth. In its 18th annual Turbine-Powered Civil Helicopter Purchase Outlook, Honeywell forecasts 4,300 to 4,800 civilian-use helicopters will be delivered from 2016 to 2020, roughly 400 helicopters lower than the 2015 five-year forecast. Demand projections by Bombardier indicate towards a 10 per cent decline in aircraft deliveries this year. Reports indicate that demand for business jets is likely to move north from 2018. However, there were encouraging reports in the light and medium jet segment which seem to be gaining ground, compared to last year. It was Bombardier which witnessed a 40 per cent drop in aircraft billings which weighed down the industry.

GAMA Chairman Aaron Hilkemann, President and CEO of Duncan Aviation, announced that total worldwide general aviation (GA) airplane shipments fell 4.6 per cent, from 2,376 units in 2014 to 2,267 units in 2015. Billings for GA airplanes also dropped to $20.9 billion, down 4 per cent from $21.8 billion in 2014. Worldwide rotorcraft shipments fell 4.4 per cent, from 998 units in 2014 to 954 units in 2015, while billings dipped 21.9 per cent, from $4.9 billion to $3.8 billion.

PISTON-ENGINE, TURBOPROP, BUSINESS JET SHIPMENTS

Shipments of piston-engine airplanes fell for the first time since 2010, down 6.5 per cent, from 1,129 units in 2014 to 1,056 units in 2015. Turboprop airplane shipments also declined, from 603 units in 2014 to 557 units in 2015, a 7.6 per cent drop. Preliminary business jet shipments were relatively flat, up 1.6 per cent, from 644 units in 2014 to 654 units in 2015. Shipments of piston helicopters rose 8.6 per cent, from 257 units in 2014 to 279 units in 2015. Turbine helicopter shipments, based on initial data, softened from 741 units in 2014 to 675 units last year.

“The mixed 2015 year-end numbers among the various sectors reflect a market characterised by plummeting energy sector revenue, economic uncertainty, and currency fluctuations in key GA markets such as Brazil, Europe, Russia and China,” GAMA President and CEO Pete Bunce said. “Given the relative strength of the North American GA market, it is particularly important that the US Congress proceed quickly to pass an FAA reauthorisation bill that contains certification streamlining and other regulatory reforms that allow manufacturers and repair/overhaul organisations to deliver products more efficiently and make the FAA workforce more productive.”

REGULATORY HINDRANCES

“In fact, with both the US and Europe looking to revise the rules governing their leading safety authorities, we are at a unique moment that brings with it opportunities and challenges in areas such as leveraging resources, certification efficiency, and better regulation for GA,” Bunce continued. “As a global association, GAMA will continue to work for more effective and efficient regulatory systems worldwide that improve safety and ensure manufacturers, repair and overhaul centres, and our supply chain can get their products into customers’ hands without delay.”

TREND CONTINUES IN 2016

In the first quarter of 2016, GAMA announced that the general aviation industry shipped 614 aircraft in the first three months of the year for a total value of $4.5 billion.

“The entire industry is feeling the impact of retrenchment in the energy sector as well as global geopolitical and economic insecurity,” Bunce said. “Despite these headwinds, our industry continues to invest in research, development and certification of more efficient and safe products. Therefore, actions taken by elected officials to stimulate R&D and improve regulator efficiency have a far-reaching impact on the economy.”

Shipments of general aviation aircraft were soft across the board with only a handful of bright spots. Piston airplane and rotorcraft shipments were stable at 191 and 60 units respectively in the first quarter compared to last year. Business jet deliveries declined by 4.7 per cent from 128 in first quarter 2015 to 122 in first quarter 2016. The turboprop airplane segment’s deliveries slowed by 6.8 per cent to 109 units. Turbine rotorcraft also declined from 141 to 103 units.

In a challenging global climate, every segment of the fixed-wing and rotorcraft market showed declines for the first half of 2016

Bunce continued, “This is why the certification and consistency in regulatory interpretation reforms contained in both the US Senate and House FAA reauthorisation bills are so critical to our manufacturers and maintenance, repair and overhaul (MRO) companies in terms of getting innovations and new technologies to market. We are also pleased that language contained in the Senate Transportation, Housing, and Urban Development Appropriations bill highlights the importance of these reforms. Both the authorisers and appropriators also recognise the importance of improving validation activities between global regulatory authorities to reduce duplicative review.”

GAMA Board members were in Capitol Hill pressing home the need for these changes with members of the US Congress. They called on the Congress to move forward on bipartisan FAA reauthorisation and appropriations legislation that expedites delivery of new products to market, better leverages industry and regulatory resources, and reduces costs to customers.

FIRST HALF OF 2016 NO GOOD

The Association subsequently released the worldwide aircraft shipment and billing figures for the first half of 2016. Industry airplane shipments declined 4.5 per cent to 970 units, and airplane billings fell 11 per cent from $10.4 billion to $9.3 billion. Rotorcraft shipments also dropped 16.1 per cent, from 467 units during the same period a year ago to 392 units in 2016. Billings for rotorcraft fell 32.5 per cent, from $2.1 billion to $1.4 billion.

“In a challenging global climate, every segment of the fixed-wing and rotorcraft market showed declines for the first half of 2016,” Bunce said. “As we saw at AirVenture last week, general aviation manufacturers are working hard to regain momentum by delivering innovative new products and technologies that enhance safety and provide substantial improvement in capability.

“Unfortunately, the US Congress has not done its part to support aircraft manufacturers or maintenance, repair and overhaul companies through its collective failure to include reforms of the outdated and overly prescriptive certification processes in the recently passed FAA extension. As US Senator Jerry Moran noted, excluding certification reform was “a sorely missed opportunity for Congress, where meaningful bipartisan accomplishments so often remain elusive.” Additionally, US Representative Peter DeFazio, the Ranking Member of the House Transportation and Infrastructure Committee, said that overhauling the FAA’s certification processes “would have created jobs.”

“As these members of Congress and others recognise, general aviation manufacturers and MRO companies, along with their employees, deserve better. We hope to see greater commitment by policymakers around the globe to give manufacturers the regulatory environment they need to succeed and allow our industry to continue to move forward,” Bunce concluded.

Piston airplane deliveries were down 4.5 per cent, from 464 units to 443 units. Turboprop shipments declined 4.9 per cent, from 247 units to 235 units. Additionally, 292 business jet airplanes were shipped in the first half of 2016, a 4.3 per cent dip from the 305 units shipped during the same period last year. Piston rotorcraft fell 10.1 per cent, from 129 units to 116 units, and turbine shipments were down 18.3 per cent, from 338 units in 2015 to 276 units in the first six months of this year.