A slowing Chinese economy isn’t slowing optimism for future business there in the eyes of Wichita’s biggest business jet maker.
And it appears Textron Aviation’s optimism has been rewarded, with the company announcing more than a dozen orders for its aircraft on the eve of the opening of the Asian Business Aviation Conference & Exposition in Shanghai, China, which begins Tuesday.
ABACE is the the Chinese equivalent of the National Business Aviation Association convention in the U.S., with nearly 200 exhibitors and 8,000 people expected to attend the show that runs through Thursday.
Bombardier Business Aircraft also is exhibiting at the show, though its static line up of aircraft does not include any Wichita-built Learjets, according to Bombardier.
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Textron Aviation’s presence at ABACE includes the static display of five aircraft: the Beechcraft Bonanza G36, Beechcraft King Air C90GTx, Beechcraft King Air 350i, Cessna Grand Caravan EX Amphibian, and an XLS-Plus.
Textron Aviation said it had taken orders from four companies in China – three general aviation operators and one flight training academy – for 11 single-engine Cessna Skyhawks and two Cessna Turbo Stationair airplanes. It did not disclose the value of those orders.
It also said it took an order from FT Business Jets Co. Ltd., based in Shanghai, for a Cessna Citation XLS-Plus. That airplane will be delivered later this year by Textron’s joint venture in China, Cessna-AVIC Aircraft (Zhuhai) Co. Ltd. That joint venture, established in 2012, currently takes assembled XLS-Pluses, installs interiors, paints them and makes them flight ready for delivery.
In an interview last month, Bill Schultz, Textron Aviation senior vice president of business development in China, said the joint venture is moving in a “phased approach” toward adding final assembly of the XLS-Pluses in China for customers based there.
He said the deliveries of the first two XLS-Pluses in China last year “is particularly good news for us” because China has generally been a large-cabin jet market Textron Aviation, through the joint venture seems to be making inroads into the market with last year’s deliveries of – and a 2015 order for – its super-light business jet, Schultz said.
Schultz acknowleged that the Chinese economy was slowing, but to high single-digits “versus double-digit percentages.”
“This represents a new normal in China,” he said, adding the new normal means a “more predictable and steady rate” of growth that will mean “better quality and value in the economic base.”
Industry analyst Brian Foley said in a note last week that business aviation in China “has already experienced a full market cycle from frothy peak to today’s quiet trough.”
But Foley doesn’t expect that trough to last beyond 2015.
“One leading indicator, the Shanghai Composite index, has nearly doubled in the past year to a seven-year high with a favorable environment for further government stimulus,” Foley wrote. “As investors and companies gain confidence in financial market vitality and stability we’ll begin to see more discretionary income move into general aviation.”