In raw figures, Cirrus had a better first quarter this year than last, but while “the trajectory of the business is terrific at the bottom line,” Cirrus CEO Brent Wouters told TheStreet.com, “the revenue line stinks” and fuel adversity may be coming. Cirrus’ first quarter was up 36 percent over the same period last year, and total billings were up 22 percent. But Wouters is only expecting to hold par with last year’s volume and revenue, while leveraging a $55 million improvement at the bottom line through cost-cutting. “Even in my five-year projection, I don’t see the business returning to the level that it was in 2007.” For Wouters, the concern isn’t in the quantity of aircraft delivered, it’s about delivering at a level that “is sustainable and at good solid gross margins.” That, he says, means continuing work to lower labor and material costs to increase margins. It also means planning ahead when it comes to 100LL.
Wouters says the Cirrus SR22-T is the company’s proposed answer if 100LL disappears. The aircraft’s turbocharged Continental engine is designed to burn the 94 octane unleaded fuel currently available and is undergoing FAA tests to determine its suitability for the lower octane fuel at the performance parameters required. Wouters sees that as an important capability because “unleaded fuel is coming whether we want it to happen now or not.” He added, “There is no more shrugging it off. We are going to be the first to market to make sure our business and our customers are protected.” At least two initiatives, by Swift Fuels and GAMI, are under way to create a viable unleaded 100 octane aviation fuel.
