Cessna Back at Pre-9/11 Levels

In 2001, the bubble had burst on technology and software stocks and the economy was heading downward.

Then terrorists attacked, sending the economy -- and the aviation industry -- into a deep slump.

At the time, Wichita's Cessna Aircraft Co. had a healthy $6 billion worth of aircraft orders on its order books. But that backlog declined rapidly as orders slowed.

Cessna "went through some tough hunkering down," Cessna chief executive and president Jack Pelton said in an interview last week.

Today, the story is much different.

With brisk orders, the company's backlog has returned to the $6 billion level.

"We are now proudly back to where we were again," Pelton said.

But the company doesn't plan to stop there.

"That's not the peak," Pelton said. He said 2006 and 2007 are "shaping up to be strong."

Cessna's marketing efforts for the most part are now focused on 2007 and beyond, company officials said recently.

"The underlying strength of this company has really improved this year," said Lewis Campbell, chief executive of Textron Inc., Cessna's parent company.

Cessna has taken orders this year for 900 single-engine airplanes. It also has taken 230 net orders for business jets, the company said last week.

Sales have been higher than expected, Pelton and Campbell said.

"This market expansion has kind of surprised all of us a little bit," Campbell said.

As Cessna increases production, it is working with suppliers to have enough product available to build aircraft. One issue is the availability of some raw materials.

Cessna also continues to hire. The planemaker wants to hire 350 workers by the end of the year, bringing the number of people employed in Wichita to about 10,000.

While the company is excited about the strong market, it also must be careful about growing at a stable, sustainable rate, Pelton said. Cessna must balance how many planes the company should deliver with what is a sustainable delivery rate, Campbell said.

And Cessna doesn't want to get too big, Pelton said.

"We don't want to grow beyond our existing footprint" in Wichita, he said.

Sustaining the momentum will involve a variety of variables, some beyond Cessna's control.

First, the economy must stay strong, Pelton said. Jet sales follow corporate profits. When they're up, so are sales.

Cessna, meanwhile, will continue to invest in programs that promote or teach flying, lobby for legislation and tax programs that support general aviation and work closely with customers to get enough data to get them into the right airplane, Pelton said.

It also will continue work on training initiatives, productivity increases and manufacturing capabilities while it invests in the research and development of new products.

"They really know how to hit the marketplace with what the marketplace wants," Campbell said.

Cessna recently said it plans to replace its current single-engine piston line of aircraft with a new family of planes. Specific details of the planes have not been decided, Pelton said, and it will likely be next year before an announcement is made.

Cessna is watching the competition and working to avoid complacency.

"The competitive landscape is getting tougher and tougher," Pelton said.

Wichita Eagle


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