Plane shipments up for Cirrus; company sees best start to year since 2008
DULUTH — The folks at Cirrus Aircraft have reason to feel good about the latest industry numbers.
After hitting a 11-year low in 2012, plane shipments were up nearly 25 percent in the first six months of 2013 compared to the same period last year. And billings shot up a whopping 60 percent.
That’s the best year’s start for Cirrus since 2008, suggesting the Duluth-based airplane manufacturer is leaving the grip of the recession behind it.
With a backlog of orders stretching for months, company officials expect strong numbers to continue the rest of the year, especially in the fourth quarter, which is usually its strongest quarter.
“Production is spoken for for five or six months,” said Todd Simmons, Cirrus’ executive vice president of sales and marketing. “We’re already seeing people ordering airplanes with delivery into 2014.”
Cirrus is not only doing better than its category of small single-engine piston planes but better than the industry as a whole, he pointed out.
The world leader in its category of small personal aircraft, Cirrus currently holds a 32 percent market share. The sector of single-engine pistons that includes Cirrus planes was up 17 percent worldwide from January to June, with billings up 20 percent, according to the latest General Aviation Manufacturers Association shipment report.
That’s good, but not as good as Cirrus’ performance.
Shipments — the preferred industry term for sales — of its SR-20, SR-22 and SR-22T aircraft totaled 130 in the first six months of 2013, up from 105 in 2012. At the same time, its billings were up nearly $20 million.
“We tend to pull the whole industry with us,” Simmons said.
Meanwhile, Cirrus’ biggest competitor, Cessna Aircraft Co., saw fewer shipments of its comparable propeller planes, which includes its Skyhawk, Skylane, Corvalis and Stationaire models. Those shipments totaled 103 for the first six months of 2013, down from 114 last year, the shipment data shows.
The general aviation industry saw total plane shipments up 9 percent worldwide for the first half of 2013, with billings up 26.4 percent. But individual categories show a mixed bag. For example, twin-engine turboprop shipments jumped nearly 71 percent, while business jet shipments dropped 4 percent.
“The mixed results in shipments — and the differences in performance among sectors — demonstrates that (general aviation) airplane manufacturers still face some strong headwinds as the global economy recovers,” GAMA President and CEO Pete Bunce said in a prepared statement.
Simmons said several factors are fueling Cirrus’ strong growth after four years of recessionary lows. Cirrus’ revamped premium models are driving most of the sales. The Generation 5 SR-22 and SR-22T have high-tech upgrades and increased seating from four to five people. While the SR-22 starts at $500,000 and SR-22T starts at $600,000, buyers tend to add costly extras that can add as much as $300,000 to the cost of the plane.
“We see people checking all the other option blocks for a fully loaded plane,” Simmons said. “That pattern is also driving increased revenues.”
Fleet sales are also providing momentum. About 20 percent of Cirrus’ shipments this year have been fleets for institutions and other nations for training pilots.
“That part of our business is getting stronger as time goes on,” Simmons said. The latest fleet order, for the Royal Saudi Air Force, follows fleets sales to the U.S. Air Force Academy and the French Air Force.
Excitement also surrounds Cirrus’ ramped-up development of a single-engine personal jet. Orders for the $1.96 million SF-50 Vision Jet have grown to 545 in recent months, with the first deliveries targeted for 2015.
In the last year, Cirrus has hired dozens of engineers, drafters and designers for the jet program. Its staff in Duluth and Grand Forks, N.D., has grown to more than 600 with more than 500 in Duluth, including 150 with the jet program. And more positions are slated to be filled.
All Cirrus planes are equipped with an all-frame parachute system; the new Vision Jet will have a parachute system as well.
Candace Renalls | Forum News Service