Textron Aviation’s Q3 Propelled by ‘Very Strong Demand’
Textron Aviation reported substantial increases in revenue, profit, deliveries, and backlog during the third quarter. The results represented “very strong demand” for business aircraft, according to Textron Inc. CEO Scott Donnelly in an earnings call this morning.
Revenue at the Wichita airframer increased $386 million from the year-ago quarter, to $1.2 billion, while profit of $98 million erased a $29 million loss during the same period last year. Deliveries for the quarter were sharply higher, rising to 49 jets, compared with 25 in last year’s third quarter. Turboprop deliveries also jumped 67 percent year-over-year, to 35 aircraft.
Backlog at the end of the quarter was $3.5 billion, which Jeffries analyst Sheila Kahyaoglu noted on the call was at a level last seen in 2010. Donnelly said the higher backlog—which grew by $721 million from the second quarter—supports the company’s expectations for returning in 2022 to a production level last seen in 2019.
Demand for business aircraft was strong across Textron Aviation’s entire product line. The company also is benefitting from new entrants to private aviation. “If I looked at the number of new customers, folks that are coming in buying a jet who have not owned a jet before, that number is probably somewhere around the 20 percent or so kind of range, which is encouraging,” Donnelly said.
Bombardier pulled in another strong quarter for orders, reaching a book-to-bill of 1.7:1, but also posted a $377 million loss as the Montreal-headquartered manufacturer continues to manage its financing costs, the company reported this morning. Its revenues jumped 17 percent year-over-year, to $1.4 billion, with increased deliveries and rising aftermarket revenues.
Deliveries rose by three units in the quarter for a total of 27 aircraft—including 15 Globals, eight Challengers, and four Learjets. This is up from the two Learjets and 13 Globals shipped a year earlier, but down from the nine Challenger deliveries.
Backlog grew to $11.2 billion by the end of the quarter—$500 million above the $10.7 billion reported at the end of 2020. Bombardier president and CEO Eric Martel remained encouraged by the market prospects, particularly for the latest addition to its Challenger family, the Model 3500, which it showcased at NBAA-BACE this month. “The response to the 3500 was incredible at NBAA,” he said.
Bombardier continues to work toward strengthening its overall financial footing, clearing out debt maturities through 2024, and building its pro forma liquidity to $1.9 billion. Even so, it is still managing debt costs, which amounted to $423 million in net financing expenses for the quarter, which was up from $227 million a year ago.
UK Court Convicts Organizer of Illegal Charter Flight
A jury at Cardiff Crown Court in the UK has found David Henderson guilty of endangering the safety of an aircraft for his role in arranging the 2019 flight that claimed the lives of soccer star Emiliano Sala and pilot David Ibbotson. The illegally chartered Piper Malibu crashed into the ocean on a flight from France to Wales. Henderson, who effectively managed the aircraft for its private owner, was also found guilty of “attempting to discharge a passenger in the UK without valid permission or authorization."
The Air Charter Association (ACA), which has urged tougher enforcement against illegal flights for hire, welcomed the verdict. “The ruling confirms that Henderson arranged and coordinated this flight illegally on behalf of Emiliano Sala,” said the UK-based group’s chairman, Kevin Ducksbury. “Fully licensed, regulated, and approved air charter operators are at the heart of the Air Charter Association’s core values and growing membership. The association is profoundly disturbed that this flight was allowed to happen but welcomes the UK Civil Aviation Authority’s representation in this case, ensuring a precedence is set and further support is provided to one of the association’s primary causes—stamping out illegal public transport.”
Prosecutors noted that Ibbotson, who regularly flew for Henderson, did not hold a commercial pilot’s license and was not qualified to fly in IFR conditions at night. His specific rating for the single-engine Malibu had expired.
Agri-business conglomerate Archer-Daniels-Midland (ADM) has signed a memorandum of understanding (MoU) with biofuel producer Gevo to support the production of up to 500 million gallons of sustainable aviation fuel (SAF) per year. The agreement would see ADM using Gevo's technology to transition approximately 900 million gallons of ethanol—more than half its production capacity at its facilities in Columbus, Nebraska; Cedar Rapids, Iowa; and Decatur, Illinois—into SAF and other renewable hydrocarbons.
Demand for SAF is expected to accelerate, with recent goals set by the U.S. and Europe calling for nearly four billion gallons of SAF production by 2030, and more than 45 billion gallons by 2050.
The two companies plan to work together on full commercialization plans and establish definitive deals that would allow SAF production to begin in the 2025 to 2026 timeframe.
“Our potential customer pipeline has grown to over one billion gallons,” said Gevo CEO Patrick Gruber. “By working with ADM, which already has committed to its carbon footprint, we have the opportunity to accelerate scale.” Gruber told AIN that his company’s process has the potential to deliver SAF at price parity with petroleum-based fuel when market incentivization is factored in.
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Rapidly-growing FBO chain Modern Aviation has expanded again with an agreement to purchase two FBOs in Puerto Rico. The deal calls for Modern to buy Hill Aviation, a Million Air franchisee that operates the FBO at Puerto Rico’s Fernando Luis Ribas Dominicci/Isla Grande Airport (TJIG) in San Juan, as well as a satellite facility at the island’s Jose Aponte de la Torre Airport (TJRV) in Ceiba.
In 2019, Hill bought out the Signature FBO at TJIG, making it the lone FBO there. The facility at Isla Grande includes a 5,000-sq-ft terminal and 88,000 sq ft of hangar space that can accommodate up to midsize business jets. Plans call for the construction of a 30,000-sq-ft hurricane-hardened concrete hangar that can shelter larger aircraft.
The deal, which is expected to close by year-end, also includes the company’s Part 145 repair station. Hill will retain its aircraft charter and management operation, which remain based at the facility.
“Isla Grande Airport has been growing by attracting new based customers as it offers significant advantages compared to other regional airports,” said Modern CEO Mark Carmen. “The FBO’s location offers quicker access to and from the main roads in San Juan, and customers can directly access their aircraft on the ramp unlike at comparable airports in San Juan.”
Gogo Business Aviation’s new 5G service is expected to deliver speeds of 25 Mbps on average with peak speeds of 75 to 80 Mbps, the Broomfield, Colorado-based connectivity provider reported.
The speed estimates are based on modeling of eight common city pairs, including New York, Miami, Los Angeles, San Francisco, and Dallas, and were confirmed by recent flight testing of Gogo’s airborne and ground-station antennas.
In addition, Gogo noted that a study involving interviews with more than 70 Gogo Avance L5 customers already has demonstrated increased speed capabilities.
“A recent survey by the Boston Consulting Group reported that Gogo Avance L5 customers experienced two to seven-plus Mbps speeds, and with 5G onboard, those speeds will increase dramatically,” said Sergio Aguirre, president of Gogo Business Aviation. “We are confident that with our new higher speeds and inherent low latency, 5G will deliver the best connectivity experience in business aviation."
Gogo is scheduled to launch the 5G service in the second half of 2022, Aguirre said, noting that deployment of the network is underway. “We’re deep into system qualification and certification,” he added. “We’re developing a comprehensive supplemental type certification [STC] portfolio, and...we announced our launch customer, Jet Edge."
Premier Private Jets, the Florida-based aircraft charter and management provider that recently acquired an FBO at Detroit area Oakland County International Airport, will hold its grand opening there on November 4.
The company is wrapping up a $1.5 million renovation project on the 10,000-sq-ft terminal, which now includes an in-house private catering kitchen. “Until now there have not been major changes in menu and service options at this airfield,” said Premier executive chef Marcus Raymond. “The enhancements we are making are key in setting us apart in this industry and catering will focus on a variety of choices, including lifestyle menus and hearty classics, customized for each client.”
Other improvements to the facility, known now as Premier Jet Services, include a redesigned lobby, upgraded pilot lounge, and additional office space.
“With private air travel increasing, our expansion is a direct response to these new industry demands and the reality that more people are choosing to avoid busy commercial airport terminals,” said CEO Josh Birmingham. “Premier remains agile and we’ve done everything possible to continue to grow by investing in cutting-edge facility updates to ensure we exceed the expectations of our discerning clientele.”
Avia Solutions Group Acquires Major London Facility
The move increases Avia’s presence at the UK capital gateway. This past March it acquired RAS Group, an aircraft interior, exterior, and completions specialist based at Biggin Hill.
It also increases the company’s UK footprint, as Avia subsidiary Storm Aviation recently purchased Manchester-based Chevron Technical Services and its Prestwick Airport-located Chevron Aircraft Maintenance. The latter provides maintenance solutions for the commercial aviation industry. Avia operates at more than 100 locations worldwide and has more than 7,000 employees.
“We’re pleased to announce the acquisition of this fantastic operation, based as one of Europe’s fastest-growing business aviation airports,” said Vygaudas Usackas, a member of Avia’s board of directors. “We look forward to working with business operators and the airport to continue delivering exceptional quality services for passengers, aircraft owners, and fleet operators landing and departing from London Biggin Hill Airport.”
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