Two Companies Making Comeback in Q1

The current dip in the world economy has naturally affected aircraft companies. After a few automotive CEOs made a tasteless decision to ride expensive private jets to Washington to beg for bail-out money, the business jet market was especially hurt. We've heard a lot about lay-offs and sales dropping. Thankfully, two industry leaders are showing what could be the start of a turn around. Cirrus and Gulfstream both had good first quarters this year.

SavannahNow.com is reporting several encouraging facts about Gulfstream. Their revenues are up 15% over last quarter and they're on pace to deliver 91 aircraft this year. The company is also righfully proud of a backlog that totals $18.5 Billion. I don't care what the economy does - even if they only deliver a small percent of those orders, this backlog should keep them busy for years to come. Gulfstream notes that more than half their sales come from outside the US. I wonder what percent is from Russia - they have a Russian Language version of their website.

Somewhat surprisingly, it appears that Gulfstream is experiencing a unique situation. The recession is really taking a toll on their smaller products (those that cost less than $25M like the G150.) However, for their large aircraft (those that cost more than $25M) deliveries have only fallen 4% during this recession.

The other company reporting good news is Cirrus. They shipped 36% more aircraft in first quarter 2010 than they did in the same time period during 2009. They're also claiming that their market share for piston single aircraft is at an all-time high of 36%. that's a very impressive number as this is a pretty wide-ranging pool. They also purport to have 75% of the market share for SR22 comparable aircraft (including the top-end Cessna piston singles and Mooneys.)

These are definitely some high-quality aircraft - I think their sales reflect that. With acquisition and operating costs relatively high for these aircraft, it seems like most of the sales might be going to business-oriented customers. (Cirrus has been marketing their SR22 as a lower-cost alternative to business jets for a few years.) Whatever the reason for the increased sales, I hope this signals an overall climb for the aircraft market as a whole. Gulfstream has been saying they expect the next couple years to still be rough, but are optimistic overall. Hopefully, we'll start to see other manufacturers showing signs of growth soon too.