Europe is ‘Wichita country’ for business jets

The world’s second-biggest business aviation show is set to get underway, and unlike the recent past could be more upbeat.

EBACE – the European Business Aviation Convention and Exhibition – kicks off Monday for three days in Geneva, Switzerland.

The show, in its 17th year, will have more than 500 exhibitors, about 60 jets and turboprops on static display, and an estimated 13,000 visitors, according to organizers.

Among its exhibitors will be Textron Aviation and Bombardier Business Aircraft, both of which could use a lift in what is for them the second-biggest business jet market, or close to it.

Those who follow the European market closely said this week that spirits at the show should be higher than they have been in the past few years.

“I really anticipate a slow show, but I think what participants will find is … a little more optimism,” said independent aviation analyst Brian Foley.

‘Spots of good activity’

Foley said a number of developments in the past year is driving his expectations for more optimism.

The recent election of a new president in France takes out some uncertainty in the region, as does new highs in the German, French and United Kingdom stock markets. And the euro has increased 5 percent this year while the U.S. dollar has fallen.

“That’s a good thing,” Foley said. “What that means is when someone overseas buys a jet it appears cheaper than if the dollar is strong.”

Business aviation forecaster Rolland Vincent is a bit bullish on the European front as well. While the region’s overall economy continues to be slow, “periphery economies” – such as in Ireland, Spain, Portugal and the Czech Republic – “are doing pretty well.”

“The edges of Europe, the growth rates are pretty solid,” said Vincent, managing director of JetNet iQ. “I’d say we’re all waiting for better days ahead … but there are spots of good activity.”

For their part, Textron and Bombardier are bringing a dozen airplanes between them to the show.

A star of the EBACE show will be the Cessna Citation Longitude. The $23.9 million super mid-size jet set for certification later this year is one of six Citation models Textron is bringing to the show, including a Citation Latitude, the company’s second-newest jet. It also will bring a Beechcraft King Air 250 and a Cessna Grand Caravan EX.

The Grand Caravan could be more appealing to European buyers this year after a new European Aviation Safety Agency regulation took affect that allows single-engine turboprop commercial flights in instrument conditions.

“That’s not going to be a disruptive thing as far as the market goes, but it could be a nice adjunct … could mean a few units sold (for Cessna),” Foley said.

Even though it now has three Global 7000s in flight testing in Wichita, Bombardier Business Aircraft won’t bring its newest and biggest business jet to EBACE.

What it will bring is its life-size Global 7000 cabin mockup to the convention center, as well as a Wichita-built Learjet 75, a Challenger 350 and 650, and Global 6000 to the static display, said Bombardier Business Aircraft spokesman Mark Masluch.

‘Wichita country’

Masluch said Europe is the second-biggest market for Bombardier business jets. Textron Aviation officials said the region is a close second to South America for its Beechcraft and Cessna planes.

“It’s definitely Wichita country over there,” said Foley, the analyst, about the importance of Europe. “Many of the destinations within continental Europe are reachable by small and mid-sized jets.”

Underscoring the region’s importance to Bombardier, the company on Thursday will inaugurate its new London Biggin Hill Service Centre, Masluch said. The new center will be capable of performing heavy maintenance on all Bombardier business jet types. It’s also the company’s first service center in Europe.

Earlier this year, Bombardier established five line maintenance stations in Austria, France and Italy.

“The expansion is an integral part of our overall strategy to enhance OEM support for our European operators,” Jean-Christophe Gallagher said in a March 2017 news release about the new line maintenance stations.

Textron Aviation has a significant service presence in the region. It has six company-owned service centers in Europe, five line maintenance stations and mobile service units — specially equipped trucks that can do limited aircraft inspections as well as engine, tire and brake service — based in Germany and southern France.

What to look for

Foley said he doesn’t expect any big sales to be made at this year’s show.

“Manufacturers don’t necessarily go there to take sales,” he said. “That’s really not the prime objective.”

Instead, Foley said, “It’s really a way to continue relationship building with prospects and existing customers.”

If there are order announcements, it will be from deals that “most likely occurred weeks in advance.”

Vincent, who will attend EBACE in part to deliver his firm’s European forecast, said there are usually some deals made at EBACE but not “on the spot.”

That could be different this year, however, because some business jet manufacturers have lowered prices on some aircraft in order to remain competitive and in some cases, move inventory.

“Given the discounts available right now, we could see some fleet order activity,” Vincent said. “It’s quite possible.”

Aside from that, he’s looking for updates on new aircraft that are undergoing flight testing. That includes the Longitude as well as Swiss airplane maker Pilatus’ first business jet, the PC-24, and Gulfstream’s G500. All three jets are expected to be certified this year.

“It’s an opportunity for OEMs to provide quite good detail” on their flight test programs, Vincent said.

This story was originally published May 17, 2017 at 9:36 AM with the headline "Europe is ‘Wichita country’ for business jets."