May 24, 2013
Cessna’s slowdown of light jet production is just that and not a suspension, President and CEO Scott Ernest noted this week at the European Business Aviation Convention and Exhibition in Geneva.
“You don’t stop a production line,” says the executive, who spent nearly three decades overseeing supply chain matters with GE Aviation before taking the reins at the Wichita plane maker in 2011.
While the recent decision to slow production of all CJ models was prompted by the continuing down market for light jets, Ernest says the rate will be reviewed regularly and can by adjusted upward in any given quarter.
He said that providing the market with “a few less CJs” will hopefully help firm their pricing and stabilize the pre-owned inventory as well.
Meanwhile, he now says that Cessna has delivered more than 400 Mustangs, Eclipse more than 200 EA500s and Embraer its share of Phenom 100s, the market for new very light jets [VLJ] is “pretty thoroughly exhausted.”
Moreover, new VLJs now find themselves in competition with used models, which constitute “a whole new market dynamic.” And while owner-operators may have cooled to new aircraft, with young used aircraft available for $1.5-2 million, “they are buying these up.”
“I have one used Mustang,” he said, “and it will be gone in two weeks.”
According to Ernest, the new M2 is sold out for 2013 and nearly so for 2014. The company should close out the year delivering six-eight Citation Xs and, once in production, the new Sovereign, Longitude and Latitude will hopefully stimulate sales as well.
But the key to a market rebound, he said, really depends on a change of consumer attitudes. “It’s about consumer confidence,” he said. “It really is.”