Textron Aviation has reported revenues of $1.2 billion for the third quarter (Q3) of 2022, a drop of $14 million compared to the same time period last year. According to the company, the decrease was “largely due to lower Citation jet and pre-owned volume, partially offset by favorable pricing and higher aftermarket volume.” Textron delivered 39 jets and 33 commercial turboprops in the quarter compared to 49 and 35 respectively in Q3 2021. Segment backlog at the end of the quarter was $6.4 billion, up $524 million from last quarter. Textron Aviation Q3 2022 profits rose $41 million from Q3 2021 numbers to $139 million.
On the rotorcraft side, Textron subsidiary Bell also saw lower revenues this quarter, reporting a $15 million drop from Q3 2021 to $754 million. The company cited “lower military revenues of $112 million, primarily in the H-1 program due to lower aircraft and spares volume, offset by higher commercial revenues of $97 million.” Segment profits came in at $85 million for Q3 2022, which is down $20 million from the third quarter of last year. Bell delivered 49 commercial helicopters in the quarter, up from 33 last year, and ended the quarter with a backlog of $4.9 billion.
Fewer Jets sold more money made……do we see a problem, here?
Selling private jets is an exercise in exaggerating value, juxtaposed to diminishing competitive markets such as airlines, charters, propeller aircraft and the iron horse (Or perhaps the horseless carriage?) Price tags in the millions make potential buyers nervous, unless their bank accounts can absorb such costs. As our media describes these people, they’re the “One Percenters”, and that cuts down significantly on the number of legitimate buyer prospects. Cessna has great jets, and their entry model (They sold T-37s to the military long before the Citation arrived) was a phenomenal–though somewhat disparaged–success. That market has all but vanished, with today’s realities reflecting a softening demand for these expensive chariots. Maybe some government buyers will make the phones ring in Wichita, but it looks like these jets will remain idle on showroom floors for the foreseeable future.
I would disagree with David’s concerns over shrinking market for private jets.. Their backlog is growing, and the “One Percenters” by my math should equal roughly 3 million Americans. As wealthy get wealthier, and reflect on COVID experiences of avoiding airlines and trying private jet flights, they will continue to strongly prefer private jet travel, whether by full or partial ownership or charter. The fact that Gulfstream delivered more jets than Beechcraft did piston aircraft so far this year is a clue that high-end piston market is shrinking but jet market is healthy. There aren’t jets waiting on showroom floors, and some manufacturers are buying and refurbishing jets to expand inventory for sale.
It’s not just the purchase price tag. Fuel costs are increasing, and if the owner isn’t going to fly the jet, then a crew must do those chores, and that costs money. Hangars, maintenance and insurance costs are increasing as well. Many of your “One Percenters” were hammered with the market drop, so they’re either broke or in an income bracket that precludes their buying jets, or any aircraft for that matter. I’m only adding color commentary to the article, which denotes softening of the private jet market. I owned a plane (Grumman TR-2), and the old joke about making a small fortune with that aircraft still applies: I started with a large fortune….
There’s lots of money in aviation. I know. I put it there.
(I’m not the same David B as above)