Former Beechcraft execs bring new venture to NBAA

Former Beechcraft executives Bill Boisture and Shawn Vick showed up at this week’s National Business Aviation Association’s annual convention with a new project.

The two helped launch a new company called Global Jet Capital, which provides leasing and lending for large-cabin, long-range business jets.

The company was launched by GSO Capital Partners, Franklin Square Capital Partners, The Carlyle Group and AE Industrial Partners.

It can fund more than $2 billion in aircraft financing.

Boisture, the former Beechcraft CEO, left Beechcraft after its sale to Cessna parent company earlier this year. Vick served as executive vice president for sales and marketing.

‘Serious interest’

Textron Aviation has been jointly exhibiting its Cessna and Beechcraft products at air shows, and it did so again at NBAA.

The level of interest and activity in its exhibits has been “amazing,” said Jim Walters, Textron Aviation senior vice president of human resources and communications.

At the same time, the line to see inside the company’s new Citation Latitude has been constant, he said.

“I think people appreciate the breadth of product opportunities we have,” Walters said.

The energy at the show has been positive.

“There’s a lot of serious interest” in the products, he said. “We hope it’s a foreshadowing” of things to come.

Analysts who attended the show said they believed it pointed to improvements in the business jet market.

“We believe most all companies in the sector seem to agree that the business market has stabilized,” Sam Pearlstein, an aviation and aerospace analyst with Wells Fargo Securities, wrote in a note to investors. “There’s less agreement that the market has been picking up – Textron’s Cessna business is one that has noted a pickup in activity and orders, which should bode well for volume in the future.”

Newly certified airplanes will lead to growth in volume in 2015 and continue to be positive for both Cessna and Gulfstream, Pearlstein wrote.

Cessna confirmed that business activity improved in September and October and that certification of its Latitude in 2015 should mean higher deliveries at higher margins next year, he wrote.

The decline in the number of used jets on the market is encouraging, he said. It’s fallen over the last year.

Honeywell estimated that about 10 percent of the fleet is for sale, down from a high of 16 percent in 2009.

Less than 3 percent of that 10 percent are jets that are less than 10 years old. Those are the planes most likely to compete with the new planes offered by planemakers.

Textron said that only 2 percent of the used Citation fleet is for sale, and about 1 percent of the fleet of King Airs is for sale.

Robert Stallard, analyst with RBC Capital Markets, also attended NBAA.

He wrote in a note to investors that the business jet market appears to be in better shape.

“We think demand for smaller jets has improved the most, from an admittedly low base,” Stallard wrote.

That sentiment is helped by the introduction of new products, he said.

“While backlogs appear stronger, we think it’s worth highlighting the risks of a buyers’ market, which could mean margins take time to recover,” Stallard wrote.

This story was originally published October 23, 2014 at 12:15 PM with the headline "Former Beechcraft execs bring new venture to NBAA."