May 12, 2011 By: Christopher Hinton
Cessna should see profitability in 2011, says Textron CFO
NEW YORK (MarketWatch) – A post-recession recovery is underway in the business-jet market, though it’s occurring at a very slow pace and may not accelerate until next year, executives with several aerospace companies said Thursday.
“We believe we are past the bottom, but the pace of the recovery is difficult to predict,” said Frank Connor, chief financial officer of Textron Corp. TXT -0.40% , the parent of Cessna.
Used-aircraft inventories have declined, typically a harbinger of new-aircraft-order growth, but sales have been fairly weak, Connor said, speaking at an analyst conference.
Business-jet deliveries are expected to be up only slightly this year from 2010.
“Deliveries were very low in the first quarter … but our expectation is that deliveries will improve over the year,” Connor said. “We expect profitability [for Cessna] in 2011.”
Executives from business-jet suppliers Goodrich Corp. GR -0.02% and Pratt & Whitney, a unit of United Technologies Corp. UTX -0.13% , echoed Connor’s view.
“We won’t really see a business-jet recovery until 2012,” said Goodrich Chief Financial Officer Scott Kuechle.
The business-jet market was slammed three years ago when the financial crisis dried up would-be customers’ access to credit and caused companies to slash spending.
Executives also made reference to the political climate at that time, recalling that the chieftains of the U.S. auto industry were being publicly chastised for flying corporate-owned jets to Washington to lobby for government bailouts, saying the atmosphere had further crimped demand.
The political atmosphere has now shifted, Textron’s Connor said, forecasting that the changed mood should help clear the way for future corporate purchases, as long as the economy holds up.
Source: WALL STREET JOURNAL