ended 2012 with its lowest sales total in at least five years, but a series of contracts for its military, trainer and special mission aircraft propelled the company to its strongest year ever in order intake and positions the Swiss airframer for growth.
The company reported 2012 at 593 million CHF ($625 million U.S.), down from 781 million a year earlier and 688 million CHF in 2010. At the same time, though, orders totaled 2.67 billion CHF on the year, more than six times the 416 million CHF taken in during 2011.
“Pilatus has never seen a year like 2012,” says Chairman Oscar Schwenk. “We knew we would not be able to better the results of 2011 … that is exactly how it turned out.” The company, however, remained confident that it had a number of orders on the horizon, Schwenk says, adding, “But the volume of the orders and the very short interval between each one took us by surprise.”
The orders came on the strength of its military and special mission business as the business and general aviation market continues to struggle. These included 75 PC-7 MkIIs for India, 55for Saudi Arabia and 24 PC-21s for Qatar. The orders were more than double its previous record orders in 2008.
The orders will provide a significant boost for the company, Schwenk notes. The orders secured in 2011 would have “provided enough work for 152 days,” he says. In contrast, the orders from last year “will (in theory) provide enough work for 4 years and 38 days.”
Pilatus last year kicked off an expansion program, increasing hiring, its production area, warehousing and equipment in preparation for growth.
The company is also making preparations for the newest member of its aircraft line and first jet in many years – the PC-24, which Schwenk says will be its “biggest, fastest and most complex aircraft yet.” The Pilatus board gave the go-ahead for the business jet last summer, and Pilatus expects to unveil the aircraft at the European Business Aviation Conference and Exhibition in Geneva in May.
While Schwenk relinquished his chief executive duties in January, he notes that he plans to be “heavily involved in the PC-24 project.” He is also focusing on new orders, along with his chairman’s role.
As for the company’s PC-12 NG, sales are still reflecting the stagnant market. Pilatus sold 62 aircraft in 2012, down one from the prior year. “The current situation is a difficult one, and for much the same reasons as in 2011,” the company says in its annual report. “In North America, our biggest market for the PC-12, there is little sign of economic recovery as yet. Many companies remain cautious – corporate priorities do not stretch to buying a new aircraft in these uncertain times.”
High-net-worth individuals are also taking a “wait-and-see” approach, and “the general aviation market is also hampered by endless debate about taxes and charges … The climate of general uncertainty is a further burden for a stagnant economy.”
Pilatus, however, is seeing a pickup in government business for its PC-12 single turboprop. “Government agencies tend to be particularly keen to invest during times of economic crisis,” the company says, adding it saw a clear increase in those sales.
While the used market has been a drag on the general aviation industry as a whole, Pilatus says it has not experienced “any threat of oversupply” of the PC-12. “On the contrary, there has been a drop in the volume of used products available, and this has nudged secondhand prices upward.”
Despite the sluggish North American market, it still accounted for 33 of the 62 PC-12s sold in 2012. Pilatus saw a pickup in Asia, where the company sold four aircraft. These marked the first sales to Asia by the company in three years. “This initial success will spur us on to pursue our development efforts in the future,” the company says.