EBACE Show News - May 20, 2008 - (Page 52) EBACE 2008 Cessna Soars Despite U.S. Economic Slowdown “Every day I ask myself what am I missing because the weak dollar. But I also think that we’re seeing when you wake up and read the papers there is no growth and demand in areas in the international marreason to be feeling good about the economy or the ket that we have never seen before. potential impact on our business. “We’re selling Sovereigns into Egypt—I think we’ve “But we have not seen any material impact. We’re sold six or eight of them there and they had maybe sold out for 2008, we’re essentially getting quickly three Citations there for all the years prior, so it’s new sold out for 2009, and 2010 is in a healthier backlog market dynamics that are occurring. position than we usually have. “A lot of that is I think just the whole global busi“So I am still feeling very bullish about the market ness climate where people are needing to get from and the fact that we can ride through this current poor place to place to conduct business, and they haven’t Jack Pelton of Cessna. economic condition that we are in domestically. A lot had to do that before. Now they are recognizing the of that’s being carried by such a strong international market, and business jet as a productivity tool to manage their businesses. —Jack Pelton, chairman, president & CEO, Cessna Aircraft. you can’t ignore that the international market is being helped by Cessna added the fast 350 and 400 to its piston line by buying Columbia, and is designing its new flagship Columbus, a $27 million airplane, from scratch. Today’s Cessna is very different appropriate products. “The Skycatcher now has over from a year ago, with chairman, president & CEO Jack Pelton 1,000 orders. We acquired Columtaking advantage of boom times bia and we believe the renamed to transform the company’s prod- Cessna 350 and 400 are natural step-ups for our single-engine uct line. Wi t h i n t h e l a s t 1 2 m o n t h s product line. “We’ve always stuck to our knitCessna launched production of its Skycatcher sportplane, acquired ting in the light and midsize jets and the Columbia aircraft company to we never had a place for our cusadd the Cessna 350 and 400 fast tomers to go beyond that. So it piston-powered personal trans- was long overdue to introduce the ports to its lineup, and launched Columbus. “Now we’re going to continue, the Columbus—the largest and longest range Citation ever—into we’re not going to back away which it will pump development from the light and midsize class. We’ve got a lot of other prodcosts of $775 million. “We stepped back and took a look at what’s made Cessna successful for the last eight years and clearly new product innovation and new product offerings have been key ingredients,” Pelton told Show News. “So we tried to look at what markets we were not serving where we felt we c o u l d l a u n c h Cessna has more than 1,000 Skycatcher orders. 52 ucts and updates in the works that will keep us strong in those markets,” Pelton said. Response to the Columbus “has been fantastic,” he noted, with 36 on order at the end of the first quarter, each secured with a $1 million non-refundable deposit. His two main challenges now are executing on the new programs while juggling the problems of success brought on by a booming market. Cessna’s backlog has soared by two-thirds in the last year, to $14.4 billion from $9 billion, and orders are pouring in faster than Cessna can push aircraft out through the door. “We’ve increased production by 50% since 2006, and will deliver 470 business jets this year compared with 376 in 2007,” Pelton said. But there are limits to how much production can be expanded. “Well, we’d like to [keep increasing it]. We’re trying to do it prudently, but we’re being very careful about what the supply chain can do and what our own internal capacity and resources can handle. You have to be very aware of all the common commodities and parts that everybody else is wanting; everybody’s growing, it’s not just us. We have to be careful that we don’t over-commit and under-deliver.” Another challenge is maintaining world-class support as the fleet expands rapidly in traditional markets and into new parts of the world. “We’ve allocated spares inventory and parts to provide better real-time service to people around the world, and we’re looking at expanding our Cessna-owned service centers in Europe, to be announced later this year. “We’re really very carefully, as the fleet is expanding, making sure that where it expands geographically we have the support and service infrastructure so that those operators can be successful wherever they are in the world.” —John Morris May 20, 2008 www.aviationweek.com/shownews http://www.aviationweek.com/shownews
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