Cessna Citation production slows
In January 2010, Cessna’s parent company Textron estimated that it would deliver 225 Citation private jets this year, down from 289 jets last year and 467 in 2008. The company has not given a readjusted production estimate for this year, nor does it apparently plan to release one during its third-quarter investor conference later next month. As a result, it was recently announced that Cessna is to cut another 700 jobs, blaming a lack of recovery and growth throughout the year. These latest cuts come on top of the 8,000 jobs Cessna has cut since 2008, amounting to half its workforce. Jack Pelton, Cessna CEO, was reported as saying, “While cancellations have slowed, the recovery and growth we expected to see throughout the year have not materialized, and the timing of any recovery remains uncertain. This requires additional adjustment to our production schedules.”
At first glance this looks like a bad news story for the private jet industry but it’s not all doom and gloom: The number of private jet movements is actually on the rise again (up 6% year-on-year in July) and, as we have seen here at PrivateFly.com, there is a definite pattern emerging of customers migrating from full/fractional aircraft ownership (and the associated upfront financial commitment) to ad-hoc charter, the ‘pay as you go’ segment of the private jet industry which is becoming more and more appealing in these cost-conscious times – especially since it is now becoming easier to search the market and book private jet charter online.
Of course, private jet charter operators still purchase new aircraft but these are chartered by a wide range of customers, some of whom would have invested in their own – or a part share of their own – aircraft in the past. So overall the industry becomes more efficient and fewer aircraft are required in circulation. It will be very interesting to see if the trend continues…