Piper Adapts to Recover From Severe Sales Slump

New Piper Aircraft is working to keep its long-term strategy in place despite a severe slump in sales since the 9/11 attacks. While its goal of doubling in size by 2005 now seems out of reach, it is still investing in its plan to become a different kind of aircraft company.

The bad news at Piper is that it expects to sell only 448 aircraft in 2001 and realize $265 million in revenue-well under the $319 million it had planned. Deliveries will be even lower next year-400 airplanes worth $225 million.

Not only has recession affected customers-many have delayed major spending-but the post-attack grounding of GA has had a severe impact on Piper's dealers, who were unable to demonstrate or deliver aircraft and simultaneously lost their maintenance, training and fuel incomes. Piper itself had to suspend production because its ramp was full of airplanes that could not fly away.

Yet Piper still plans to implement changes outlined earlier by president and CEO Chuck Suma. Flight Plan 2005 has been replaced by Flight Plan Now, but many of the goals remain. Piper is going to become more brand-conscious and is going to work to improve customer service. It is going to put its own stamp on training. It will develop new aircraft in secret and announce them only when it is almost ready to deliver. Piper will also work to improve its manufacturing efficiency.

On a brighter note, sales of the top-of-the-line Meridian have not been hit as badly as some other models-orders are down but there have been few cancellations-and the training market is still active despite airline cutbacks.