Gulfstream moves closer to 1st G650 delivery

Gulfstream will deliver the first completed G650s to customers "within the next few weeks" as it moves to address a five-year backlog for the ultra-long-range type.

But despite the large orderbook for the the new twinjet, Gulfstream does not plan to consider increasing the production rate for the G650 until it reaches its production "battle rhythm", says Jay Johnson, chairman and chief executive of parent company General Dynamics.

Speaking to analysts in a third-quarter earnings call on 24 October, Johnson says pilot training classes for the first aircraft have been completed and the company is "marching along smartly" towards the first delivery from its completion centre to a client.
 
The Savanah, Georgia-based airframer had originally planned to deliver 17 aircraft to customers this year but a delay in achieving certification from the US Federal Aviation Administration - which it eventually obtained on 7 September - will reduce that figure, says Johnson. It is scheduled to hand over a further 33 aircraft in both 2013 and 2014, he says.

"To change that, to wick it up, based on the demand, based on the five-year backlog is certainly something we are desirous of doing, but we're not going to turn the rheostat up until we've hit, as I call it, our battle rhythm, and we're just not there yet."

During the quarter, its aerospace division, which includes the Jet Aviation completions and maintenance business, recorded turnover of $1.8 billion, with earnings of $261 million.

Profitablity was "modestly lower" at Jet, says Johnson, "as the business works aggressively to confront overhead absorption issues exacerbated by the European debt crisis" which have hit aircraft ulitisation and MRO work. The business continues to trim the size of its operations in slower markets, he adds, and is taking "positive steps forward".

At quarter-end Gulfstream's backlog stood at just over $16 billion, including approximately five years of G650 production and around 18 months of G450 and G550 deliveries.

The third quarter was Gulfstream's strongest of the year for orders so far, "driven by several multi-aircraft deals placed by North American companies". Year-to-date, North American customers represent nearly 60% of Gulfstream's order book, it says.

Despite the ongoing weakness in Europe, Johnson expects the company to book several multi-aircraft "international deals" in the coming months.

Gulfstream will display both its newly certificated jets, the G650 and G280 at NBAA in Orlando.

(Flight Global News - Dominic Perry)