Duluth-based Cirrus Aircraft Stays on Top in its Market

Despite another drop in plane shipments, Cirrus Aircraft outsold its competitors in 2011 and continued to be the world leader in its class of small personal aircraft.

The Duluth-based airplane manufacturer now commands 35 percent of the world’s single-engine piston plane market. That’s up from 28 percent three years earlier and from 11 percent a decade ago, according to General Aviation Manufacturers Association annual shipment reports.

“Every year, we’ve increased our share, despite the downturn,” said Todd Simmons, Cirrus’ vice president of sales and marketing. “We continued to grow during economic down times.”

At the same time, Cirrus plane shipments — the number of its SR-20, SR-22 and SR-22T planes sold — continued on a five-year decline. It delivered nine fewer planes in 2011 than 2010. Since 2006, deliveries have plummeted from 721 to 255 planes, GAMA’s shipping reports show.

But Cirrus — whose SR-22 is the world’s best-selling single engine personal aircraft of its type — stayed on top.

Compare Cirrus’ 255 shipments last year to the Cessna’s 181 shipments or Diamond’s 72, Piper’s 17 and Mooney’s zero shipments of comparable four-seat, single-engine piston planes, according to the 2011 shipment report released last week.

Cirrus’ 3.5 percent drop in shipments wasn’t unusual. It paralleled the 3.5 percent drop in the general aviation industry worldwide.

“Because we’re such a big player in the business, we tend to mirror the industry,” Simmons said.

Cirrus, however, bettered the 5 percent drop in its class of single piston-powered aircraft worldwide. And like that category of planes, Cirrus began its dramatic downward sales trend in 2008 as the industry took a major hit with the economic recession.

Amid declining shipments, however, Cirrus boosted its revenues by cutting costs and selling more fully loaded planes.

“Because of cost reductions since 2008, we’re leaner,” Simmons said.

The company reached out to international markets, which have grown to 40 percent of its business today. But with Europe’s economy uncertain, Cirrus is looking more to Latin America for a stable market and to China, Asia and Australia for faster growth, Simmons said.

As a result, Cirrus finished 2011 with its strongest quarter since 2008. Its 89 planes shipped during the quarter included 20 SR-22s delivered to the Civil Aviation Flight University of China in Luoyang, China.

And in 2012, Cirrus’ shipment totals will get a boost when it delivers most of the SR-20s ordered by the U.S Air Force Academy’s Powered Flight Program.

That institutional market for training aircraft is another part of Cirrus’ strategy for growth in a down market. Flight schools and governments around the world are renewing their fleets and seeking the latest safety and cockpit technologies, Simmons said.

“Unfortunately, we are still in an industry that’s contracting from historically highest levels,” Simmons said, referring to the heyday of the mid-2000s.

In 2011, all three industry sectors — piston, turboprop and business jets — continued to see a drop in shipments, but those declines shrunk to single digits percentages, a sign that the industry’s downward spiral may be coming to an end, GAMA Chairman Caroline Daniels said.

“A majority of the market fundamentals are moving in the right direction,” Daniels said in a statement.

She noted some of those trends: corporate profits remain at record high levels; flight activity is up; the used plane market is up; emerging markets are driving new sales; there’s a pent-up demand for new planes; and the credit market is easing, which could return growth to the industry.

Simmons doesn’t see the industry returning to the pre-recession growth levels anytime soon. But he thinks the industry has hit bottom and will stabilize or improve slightly in 2012.