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Recession takes toll on product development
March 2, 2011
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  • By Fred George

    Rolland Vincent, president of a Plano, TX consulting firm bearing his name, points out in his February 2011 newsletter that business jet manufacturers must spend “hundreds of millions of dollars” to develop new aircraft and commit to development programs that are at least five years long to maintain competitive position. Indeed, some new business jet programs cost in excess of $1-billion and it may take a decade to refine a new product before it’s ready for customer deliveries.

    In spite of the time and expense it takes to bring a new aircraft to market, most models only have strong production runs of no more than ten years. After that, only four to seven percent of deliveries will occur.

    Light jets have the steepest rise in production rates after initial certification. Deliveries decline sharply after the third year of production. Medium jet deliveries also peak during the third year of production, but the subsequent decline in deliveries is less severe. Large cabin aircraft reach their peak in year four of production and delivery rates remain fairly strong through year seven. But, by year ten, deliveries of all models fall off to about two to three percent.

    This reality compells manufacturers to launch new or derivative aircraft development programs about five years into the production run of current models. Sometimes, a new product must be launched at the peak of production of an existing model, causing plenty of heated discussion in board rooms, Vincent notes.

    In addition, the deep 24-month recession put strains on research and development budgets unlike anything business aircraft manufacturers have experienced in decades. Business jet deliveries fell by 12.3 percent from 2009 to 2010, according to GAMA. Jet deliveries for US manufacturers dropped 29.2 percent.

    Bombardier, Cessna and Hawker Beechcraft, among other light jet manufacturers, were the hardest hit. Their revenues plummeted as though trapped in a microburst. Only Embraer emerged virtually unscathed.

    Recovering from the resulting damage to light jet development programs make take several years. Just look at the slowdown in the Hawker 200 [aka Premier II] program. There’s no hint of an immediate launch of a Citation CJ5 or CJ6 from Cessna, let alone a resurrection of the Citation Columbus. The expected midlife update of the Learjet 40XR / 45XR isn’t likely to improve runway performance, cruise speed or maximum range.

    So, don’t expect to see lots of dazzling new light jet model announcements at EBACE in Geneva or NBAA 2011. The first new models are likely to be announced by long-range, large-cabin aircraft makers because those companies are the healthiest. Even so, it be years before manufacturers launch large numbers of new aircraft development programs. Most “new” model announcements will involve new paint, new puff, new posh and new prices.

    http://www.aviationweek.com/aw/blogs/business_aviation/index.jsp?plckController=Blog&plckBlogPage=BlogViewPost&newspaperUserId=2f16318d-d960-4e49-bc9f-86f1805f2c7f&plckPostId=Blog:2f16318d-d960-4e49-bc9f-86f1805f2c7fPost:6bd723fc-094b-4e98-a9de-9a079c713b75&plckScript=blogScript&plckElementId=blogDest

    Source: AVIATION WEEK
    Date: 2011-03-01