There are two reasons for this. First, corporate buyers are ordering aircraft. Second, many of the new entrants that discovered business aviation are happy. OEMs did see a brief pause in sales when several US banks had issues, but demand has bounced back since.

Demand in the second quarter was at the same level as the demand in the first quarter. It felt very similar,” said Phebe Novakovic, chair and chief exec of Gulfstream parent General Dynamics on an analyst call this week. “As we enter Q3, we have a very strong pipeline.”

 General Dynamic’s Aerospace division (which includes Jet Aviation) had a book-to-bill ratio of 1.3 in the second quarter of this year. This is down from 1.96x in the second quarter of 2022 (and 2.03x in 2021). A 1.3x ratio shows the market may be down but is far from out. Gulfstream delivered 24 aircraft in this quarter versus 22 in 2022.

 “It’s really the Fortune 500 that are really driving the demand. These are long-established customers as well as new Fortune 500 customers,” said Novakovic. She says that ultra-high net worth buyer demand is still strong. Gulfstream is also seeing strong demand from the Middle East and Asia.

Dassault saw a slowdown in the last quarter of 2022 which has continued for the first half of this year. The French manufacturer booked 12 new Falcon orders in the first half of 2023 compared with 41 in the first six months of 2022. This gave the company a book-to-bill of 1.33.

Dassault delivered nine Falcon business jets in the first half of the year against 14 in the first half of 2022. It expects to deliver 35 aircraft – including Falcon 6X. While orders are down, it has a backlog of 90 aircraft compared to 87 at the end of June 2022.

Textron Aviation had a book-to-bill of 1.2x. “The market is still quite strong and we’ve posted a strong book-to-bill again in the quarter,” said Scott Donnelly, chair, president and CEO of Textron (we hope he gets three salaries for doing all these jobs). “We continue to be really happy with how the market is behaving in terms of demand and pricing.”

Textron Aviation’s backlog at the end of the second quarter was $6.8 billion – up from $6.4 billion at the end of 2022. Textron had hoped to deliver around 200 jets this year, it expects to deliver fewer now (in 2022 it delivered 178) because of issues with getting parts from suppliers.

Gulfstream had planned to deliver about 145 aircraft in 2023, it is now expecting to be closer to 140 jets. Some of these are likely to be its new G700.

Supply chain problems are easing but manufacturers will not rush to increase production when things improve. This prudence and the new customers who have entered the market mean that the industry is well placed for a soft economic landing – and in a better position for a hard one.

“The demand environment is driven by the fact that people – in particular people who have come into this market and started using aircraft and experienced what private aviation is all about – have had a great experience,” said Donnelly. “They are time machines, right? It allows you to do things that you just can’t do if you’re using commercial transportation. The productivity, the efficiency, the ability to get from anywhere to anywhere on your time and in an expeditious way is something that more and more people have been exposed to.”

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The division’s revenue for the quarter dropped by 3% compared with Q1 2022, from $90m to $87m. Embraer said this was “due to changes in the mix of light jet deliveries”.

The division made up 12% of the company’s overall revenue of $717m, which increased 19% year-over-year (YoY).  

The OEM said it continues to face supply chain constraints and had cash consumption of $399m due to seasonality and in preparation for higher deliveries in the coming quarters.

Debt increased YoY, from $720m in Q1 2022 to $1.1bn, but when its Eve Air Mobility division is removed from this, debt increased from $1.03bn in Q1 2022 to $1.43bn.

The company reported last week that it delivered eight business jets in Q1 of this year, level with Q1 2022.

In its full year 2022 results, Embraer said it aims to deliver 120 to 130 business jets this year, with revenue estimated between $5.2-$5.7bn and free cash flow of $150m or better. In today’s investors call, the company said it is still on track to meet this.

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The OEM, which makes Beechcraft and Cessna aircraft, said the increase was due to higher pricing of $58m and higher volume of $51m, which included higher defense and aftermarket volume. Profit also increased in the same period from $100m to $125m, largely due to favourable pricing, inflation and higher volume.

Jet deliveries in the quarter were down from Q1 2022, to 35 jets delivered from 39 last year, while turboprop deliveries increased from 31 to 34.

At the end of Q1 2023, Textron Aviation’s backlog reached $6.5bn. Earlier this week, the firm announced the delivery of its 400^th Cessna Citation CJ4 Gen2 aircraft.

Textron Aviation Q1 financial results – at a glance

• Revenue up to $1.1bn
• 35 jets delivered, down from 39
• Profit up to $125m
• Backlog of $6.5bn

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The company’s midsize jet deliveries remained level with last year, having delivered four in both Q1 2023 and Q1 2022, but it delivered only 17 large cabin jets compared with the 21 this time last year, according to parent company General Dynamics’ (GD) financial results.

The drop in deliveries was due to supply chain disruptions which also impacted on manufacturing efficiency, according to GE. Its book-to-bill ratio was 0.9:1 for the quarter.

Revenue for the aerospace division, which also includes services provider Jet Aviation, decreased from $1.9bn in Q1 last year to $1.89bn, with operating earnings also dropping from $243m to $229m.

GD’s backlog for its aerospace division rose from $17.6bn in Q1 last year to $19.3bn, with the total estimated contract value increasing to $20.1bn, up from $19.4bn.

“Aerospace held its own in a very difficult operating environment,” said Phebe Novakovic, chairwoman and CEO, GD. “Importantly, this is the first quarter in which we have missed an airplane delivery as a result of supply chain issues.”

In an investors call, Novakovic said the company expects supply chain issues to be resolved in the final half of the year

She added that certification of the G700 is still expected to happen in late summer this year.

GD Aerospace Q1 financial results – at a glance

• Revenue down to $1.9bn
• Operating earnings down to $229m
• Operating margin 12.1%
• Backlog up to $19.3bn
• Estimated backlog value up to $20.1bn

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The sale of new and preowned jets contributed $1bn towards the growth in revenue, with the majority of the remaining revenue coming from $424m in aftermarket services. The firm said its strategy to have aftermarket revenues of $2bn by 2025 is on track, having increased its aftermarket revenues by more than 50% since 2020.

Adjusted EBITDA also increased by almost 30%, from $167m in Q1 last year to $212m this year. While the company made a loss in Q1 2022 of $287m, it turned a profit this quarter, with net income of $302m.

The OEM used up $247m in cash flow to build inventories for 2023 deliveries, as well as investment to complete its new facility at Toronto Pearson International Airport. Despite this, its available cash and equivalents remained strong at $1.1bn compared with $1.3bn at the end of 2022, while backlog remained steady at $14.8bn.

Since the end of 2022, Bombardier cleared $401m of debt, reducing it to $5.6bn. Aircraft deliveries for the year ahead are on track to meet or exceed 138 aircraft.

In the accounts, Bombardier said it expects the business aviation industry to remain stable in the short term, driven by a strong backlog of around two years for the industry that should stabilise revenues. While market uncertainty and increasing interest rates could affect order levels in the short term, the company said it still expects growth due to the rise in the number of high-net-worth individuals and the ongoing network constraints of the airlines.

Bombardier Q1 results – at a glance

• Revenue up 17% to $1.5bn
• Adjusted EBITDA up 37% to $212m
• Net income $302m
• Cash and equivalents $1.2bn
• Available liquidity $1.4bn
• Backlog $14.8bn

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The company delivered 50 business jets within the fourth quarter (Q4) of the year, consisting of 33 light jets and 17 mid-size jets.

Executive jets delivered in 2022 increased 10% from 2021 to 102. Of this, 59 were Phenom 300, 21 were Praetor 600, 15 were Praetor 500 and the remaining seven jets were Phenom 100 aircraft.

Embraer said the division experienced “strong demand across the portfolio and sustained levels of sales”.

Overall backlog for the group reached $17.5bn by the end of 2022. A fifth of this came from business jet orders, accounting for $3.85bn. 

The executive jet division also accounted for a fifth of the group’s 2022 revenue. Embraer Executive Aviation turned over $998m of the firm’s $4.5bn in revenue which was up from $4.2bn in 2021.

Embraer ended the year with $540m in free cash flow, which was in part “driven by excellent performance in the executive aviation division” and it reduced its net debt by $457m since 2021, to $950m.

Having focused on recovery in 2022, the firm is shifting its focus to growth from 2023 to 2026. In its guidance for this year, Embraer said it aims to deliver 120 to 130 executive jets. It added that it estimates revenue between $5.2-5.7bn, with a conservative objective of $150m or better in free cash flow.

In an investors call, Francisco Gomes Neto, CEO, Embraer said: “These results indicate that we are moving consistently in our transformation journey towards sustainable growth.”

He added: “Challenges remain ahead with the supply chain, however, we remain optimistic about the future of the company in terms of growth, revenue and profitability.”

Embraer 2022 results – at a glance

• Total aircraft delivered up 12.7%
• Total backlog up $500m to $17.5bn
• 50 business jets delivered in Q4
• 102 business jets delivered in 2022, up 10%

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The orders rose from 51 in 2021 to 64 last year, despite cancelled orders for Russian aircraft due to the war in Ukraine. The value of the orders also rose during the year, from €1.9bn in 2021 to €2.1bn.

Deliveries were down slightly on guidance from 35 to 32, but up on 2021’s deliveries of 30. The book-to-bill ratio for Falcon aircraft for the year was 2.

Backlog reached the highest ever level for the OEM, rising to 87 Falcon aircraft with a value of €4.7bn from €3.1bn in 2021, and more than doubling from €2.1bn in 2020.

“The market is active, but sales began to slow toward the end of the year,” said the OEM. “Business aviation traffic in the high-end segment was still higher than in 2019 but began to level off at the end of the year.”

Looking at group-wide performance, Dassault Aviation (which includes ExecuJet MRO companies and Dassault Aviation Business Services) recorded revenue of €35bn for the year. It made €6.9bn in net sales in 2022, with a net income of €830m. Borrowings and debt stood at €234m for the year, with the group’s cash in hand increasing from €4.6bn in 2021 to €9.5bn. Dassault Aviation said this increase was due to advances received for export contracts and the resilience of its Falcon aircraft.

Group objectives for 2023 include obtaining certification for the Falcon 6X and entering it into service and continuing the development of the Falcon 10X. This is in line with what the company previously announced in May last year, when it announced that the first Falcon 6X deliveries would move to mid-2023 rather than the end of 2022 due to covid-related delays.

Another objective for this year is improving the firm’s carbon emissions. The accounts said the Falcon 10X will be “natively 100% Sustainable Aviation Fuel (SAF) compatible as soon as it enters service”. Current Falcon aircraft are certified to fly with a SAF blend up to 50%.

The group’s total backlog, including its defense aircraft, reached €35bn, up from €20.7bn in 2021, while total order intake rose from €12bn to €21bn.

Dassault Aviation 2022 results – at a glance

• Group orders up to €21bn, Falcon orders up to €2.1bn (32 Falcon jets)
• Group backlog €35bn, Falcon backlog €4.7bn (87 Falcon jets)
• Falcon 10X undergoing development, due to enter service in 2023
• Dubai maintenance hub due to open in 2023
• Service centres in Florida and Kuala Lumpur due to open in 2024
• 1,500 staff hired, 24% of these were women

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The Swiss OEM reported orders for the year totalling over CHF1.6bn ($1.7bn) and an operating income of CHF226m. This brings the firm’s order book value to a total of around CHF2.4bn.

Hansueli Loosli, chairman, Pilatus said: “I’m very happy with the year-end results and the Pilatus team performed very well. Our PC-12 NGXs and PC-24s (pictured) were, and are, absolute bestsellers, our order books are full.”

In 2022, Pilatus delivered 40 PC-24s, 80 PC-12 NGXs, 10 PC-21s and three PC-6s. In its General Aviation Business Unit, a purchase agreement for more than 20 PC-12 NGXs was signed with the US company Tradewind Aviation, doubling the business airline’s fleet.

The company’s biggest market was The Americas, with 41.9% of sales coming from the region, closely followed by 35% of sales from Europe.

However, Loosli noted that no new orders for trainer aircraft were signed last year. “But the demand is there in government aviation as well, and we receive a high volume of enquiries. I’m very confident that we will reel in an order soon,” he said.

Pilatus said that whilst aircraft deliveries account for a large share of the results, the customer service business unit has grown by around 10% from 2021.

Last year, the company acquired US sales and service centre, Skytech, gaining another 93 full-time employees. Skytech will continue to sell and service PC-24s and PC-12s along the US east coast.

Supply chain problems had continued to disrupt production and impact financial performance, said the Swiss-based OEM.

Markus Bucher, CEO, Pilatus, said: “Rarely has the company had to operate in such a geopolitically unpredictable period. Never before have we encountered such serious supply chain difficulties.” Despite the instability of the market that Pilatus has still benefitted from “exceptionally high demand” for its aircraft, he added

The firm remains “confident”  about the outlook for 2023, with the construction of its maintenance hangar in Buochs, Switzerland to start by mid-2023. It also expects the delivery of the 2,000th PC-12 and 200th PC-24 this year. Another building for its composite components production site at Ennetbürgen, Switzerland is due to open this year.

Pilatus 2022 financial results – at a glance:

• Sales totalling around CHF1.3bn ($1.38bn)
• Total order book valued around CHF2.4bn
• Deliveries of 40 PC-24s and 80 PC-12 NGXs
• The Americas account for 41.9% of sales and Europe 35%.

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The Canadian OEM said the “healthy backlog” alongside its 1.4 full-year book-to-bill ratio reflect “continued favourable medium and long-term” market conditions.

Its revenue increased 14% year-over-year (YoY) to $6.9bn in full-year results for 2022 and is projecting  revenue of $7.6bn this year.

It delivered 123 jets in 2022, 45 of which were delivered in the fourth quarter (Q4) and is expecting to deliver a further 138 this year.  

Bombardier attributed its revenue growth to “higher deliveries, a favourable aircraft mix” and its aftermarket services. These  reached a new full-year revenue peak of $1.5bn, up 22% YoY.

The company also reported $735m in free cash flow, but is expecting it to drop down to a third of this figure ($250m) in the coming year. The firm used cash from the balance sheet and operations to help clear $1.1bn of debt.

In terms of profit, Bombardier’s EBITDA was up 45% from last year to $930m. This was driven by increased Global 7500 earnings, cost structure improvements and higher aftermarket contribution.

The results are “a resoundingly positive culmination of a strong year and a testament to the team’s effort to execute in the fourth quarter”, according to Éric Martel, president and CEO, Bombardier. “We exceeded commitments across the board, be it on deliveries, our growing aftermarket business and profitability,” he said. “This puts us ahead of our plan and gives us the flexibility to be even more proactive and opportunistic going forward.”

Bombardier results – at a glance 

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Gulfstream had a book-to-bill (or new sales to aircraft deliveries) ratio of 1.4 in the fourth quarter of 2022. Orders were $3bn compared with $2.7bn in the third quarter. In 2021 and 2022 Gulfstream sold 400 more aircraft than it delivered. Which is why it now has a $19.5bn backlog, up 19.8% from the end of 2021, and 68% in the past few years.

Gulfstream – which continues to deliver an impressive 13.2% margin (up from the 12.9% it forecast) – delivered three fewer aircraft in the fourth quarter than it hoped. This was mainly due to customers wanting to change deliveries and not supply issues. Despite delivering just one more aircraft, its sales for 2023 were up $432m to $8.57bn from 2021, because of strong sales at Jet Aviation and Gulfstream services.

“Corporate America has been very active, both public and private companies and high net worth individuals. Europe remains slow but the Middle East has picked up. Southeast Asia – not China – has been increasingly active,” said Phebe Novakovic, CEO, General Dynamics. “We have got good demand across all of our offerings in all of our aircraft.”

Gulfstream is only using a book-to-bill of one for its 2023 cashflow forecast but says that it could beat this. It is planning to deliver 145 aircraft this year, up more than 20%.

Textron is similarly bullish. It delivered 178 jets in 2022 (up from 167 in 2021) and 146 commercial turboprops (up from 125).

“Obviously, the market has been very strong,” said Scott Donnelly, CEO, Textron. “But we haven’t seen a material change in terms of order activity.”

Textron Aviation ended the year with a $6.4bn backlog and Donnelly is optimistic that backlogs will stay. “This industry worked this way for a very, very, very long time. The aberration has been since 2008 to the last two years ago. This industry has been a backlog business and it should be a backlog business,” he said. “Where we are sitting today is what normal should look like.”

The Textron and Gulfstream figures follow on from preliminary results from Bombardier for 2022. It had a full-year book-to-bill of 1.4 – growing its backlog to $14.8bn (from $12.2bn at the end of 2021).

Donnelly is confident that while manufacturers will be affected, they are much better positioned for an economic slowdown than in 2008. “We have kind of factored in thinking that we will have a mild recession – but I don’t think it’s going to be dramatic. We are certainly not thinking about something in the scope of back in 2009-2010,” he said. “We are in a very different place than we have been in because we have a significant backlog. If you go into a modest recession, you’ll see a slowdown in booking. But you’ve got almost two years of backlog sitting there that you’ll continue to execute.”

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