On the same day that the General Aviation Manufacturers Assn.’s (GAMA) state of the industry report showed the number of business jet deliveries in 2016 were at the lowest level since 2004, one major avionics original equipment manufacturer (OEM) gave more bleak news about the state of the business jet industry. Rockwell Collins Senior Vice President and Chief Financial Officer Patrick Allen, speaking at the Barclays Industrial Select Conference Wednesday, said he believes a fundamental change in business aviation flying has changed long-term growth prospects for business jet avionics suppliers.
Allen’s comments came on the same day GAMA released its 2016 year-end General Aviation Aircraft Shipment Report, which showed a total of 661 business jet shipments in 2016, an 8% decrease from 2015’s total of 718 deliveries. The business aviation divisions at Rockwell Collins, and several of its competitors such as Honeywell Aerospace and Astronics Corp., have also reported declines in sales in recent months.
“The business jet market, which remains an important part of our portfolio, we don’t see as being a long-term significant growth area. I hope we’re wrong, but that’s how we look at it today,” said Allen.
Allen noted that Rockwell Collins has been forecasting a recovery in business jets for a number of years, but like a lot of other companies and analysts, they have “been consistently wrong.”
The latest business and general aviation avionics sales report released by the Aircraft Electronics Assn. (AEA) shows that the business jet avionics sales have been down for companies across the board as well. In the first nine months of 2016, total forward and retrofit business and general aviation avionics sales declined by 6.2%, compared to the same period in 2015.
Rockwell Collins CEO Kelly Ortberg recently expressed similar sentiments about the business aviation market during his recent presentation at the Cowen Aerospace and Defense Industrials conference earlier this month.
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