G700 Launch Boosts Gulfstream Order Book To New Highs
Orders for Gulfstream business jets in 2019 were the highest in more than a decade and the second highest ever, buoyed by demand for its new models, parent company General Dynamics (GD) says.
Gulfstream’s new-aircraft book-to-bill ratio for the fourth quarter of 2019 was a hefty 2:1, compared with 1:4 for the year, boosted by the launch in October of the ultra-long-range, ultra-large-cabin G700. Excluding the G700, book-to-bill for 2019 was still above 1:1, GD CEO Phoebe Novakovic told analysts on Jan. 29.
“The order activity [at Gulfstream] was stellar in the quarter,” Novakovic said. “Orders for all of 2019, in dollars and units, were 54% higher than in 2018,” she said, boosting Gulfstream’s funded backlog by $2 billion to $13.3 billion, up 17.4% year-on-year.
Orders for the G700, which is to enter service in 2022, have not come at the expense of its current flagship, the G650. “The G650 backlog has increased,” said Novakovic, adding that the G700’s introduction has clarified the product offering and increased demand for the G650.
Gulfstream is still proceeding with plans to reduce G650 output through 2020-21 as it ramps up production of the new large-cabin G500 and G600. Novakovic says this will balance production with the backlog and reduce the order-to-delivery wait time for a G650 to a more normal level.
Full-year revenues at Gulfstream were up 15.9% year-on-year to $9.8 billion, on higher aircraft deliveries. The company shipped 114 large-cabin aircraft (up from 92 in 2018), 33 mid-cabin aircraft (29) and 17 pre-owned aircraft (seven). The forecast for 2020 is 150 aircraft and $10 billion in revenues.
Operating earnings for the year were $1.5 billion, up 2.8% year-on-year, and operating margin was 15.6%, down from 2018 because of higher pre-owned sales and the costs of ramping up production of the G500 and G600. Excluding pre-owned aircraft, the underlying margin was 16.1%, Novakovic says.
Updating progress on the G700, Novakovic said all five flight-test aircraft have been completed and an interior is being installed on a sixth. The program is making good progress toward first flight, she said.