“In the [second] quarter, our team delivered higher revenue, earnings per share, and cash flow,” said Scott C. Donnell, chairman and CEO, Textron. “At Aviation and Bell, we continued to execute on key programs, including the Citation Ascend and FLRAA.”

The YoY $113m increase in revenue came from higher pricing of $57m and higher volume and mix of $56m.

Textron Aviation delivered 42 jets in the quarter, down from 44 in the second quarter of 2023, and 44 commercial turboprops, up from 37 in last year’s second quarter.

On the bottom line, the aviation segment’s profits increased to $195m, up $24m from same quarter last year.

Meanwhile, the company’s backlog at the end of the second quarter was $7.5bn slightly higher than $7.3bn at the end of first quarter 2024.

Overall, Textron’s second quarter revenue increased by 3%YoY to $3.5bn attributable to growth in Aviation, Bell and Systems segments which offset the decline in revenues from Industrial and eAviation segments.

Despite higher topline, the company’s net income declined during the quarter under review to $259m in the second quarter from $263m from last year. The company booked special charges of $13m, which the company said was due to “headcount reductions in the Industrial, Textron Systems and Bell segments.”

This translated in to earnings of $1.35 per share, as compared to $1.30 in the second quarter of 2023.

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Leopold has been with Textron for nearly 24 years and was most recently vice president of the company’s North American customer service centres.

She will oversee pre-owned aircraft business activities and sales support functions including sales operations, data analytics, customer relationship management, aviation training and simulator development.

“I am confident that Tracy’s extensive experience, passion for our products and strong customer relationships make her well-prepared to lead this team,” said Lannie O’Bannion, senior vice president of Global Sales and Flight Operations at Textron Aviation.

Leopold has also been a regional sales director focusing on pre-owned product sales and led a team in global aftermarket part sales and aftermarket service centre network sales

Berger has retired from the role after 35 years of “outstanding leadership” with the company.

“I want to personally recognize Ed for his commitment to the success of our business, customers, employees and community during his tenure,” said O’Bannion.

Textron announced its revenue in the second quarter increased 8.2% year-over-year to $1.5bn from $1.4bn in the same period last year with higher contribution from both better pricing and higher volumes.

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“In the quarter, we saw profit growth across our Aviation, Bell, and Systems businesses,” said Scott C. Donnelly, chairman and CEO, Textron. “At Aviation, we saw continued strong market demand which contributed to $177m in backlog growth. At Bell, we saw revenue growth driven by the FLRAA program.”

The company said that the Textron Aviation’s revenues increased by $39m from last year’s first quarter, reflecting higher pricing of $48m, partially offset by lower volume and mix of $9m.

Meanwhile, Textron Aviation delivered 36 jets in the quarter, up from 35 in the first quarter of 2023, and 20 commercial turboprops, down from 34 in last year’s first quarter.

In terms of profitability, the aviation segment’s profit increased by $18m to $143m during the quarter under review driven by the favourable impact from pricing, net of inflation of $14m.

The segment’s backlog at the end of the first quarter was $7.3bn.

Overall, Textron’s revenue increased by 4%YoY to $3.1bn with a major boost of this coming from the higher sales in aviation and helicopters segment (Bell). This translated in to net income of $1.03 per share, as compared to $0.92 per share in the first quarter of 2023.

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The filings showed Textron Aviation made lower jet deliveries of 50 jets in the quarter, down from 52 last year, and 44 commercial turboprops, down from 47 last year.

However, Textron Aviation’s segment profit improved by $23m to $193m during the fourth quarter. The company said the higher profit was due to “a favourable impact from pricing, net of inflation, of $51m, partially offset by lower volume and mix of $22m.”

Textron Aviation backlog at the end of the fourth quarter was $7.2bn.

On a cumulative basis, the Textron Aviation segment posted revenue of $5.4bn in 2023 compared to $5.1bn in 2022 with profits improving to $649m from $560m respectively.

Overall, Textron’s fourth quarter 2023 income from operations clocked in at $1.01 per share, as compared with $1.07 per share in the fourth quarter of 2022. Operating margins witnessed slight erosion during the fourth quarter on account of $126m charges resulting from the implementation of restructuring plan.

“2023 was a strong year at Textron with solid revenue and profit growth along with segment profit margin expansion,” said Scott C. Donnelly, chairman and CEO, Textron. “At Aviation, we saw continued backlog growth and, at Bell, the team began executing on our transformational FLRAA programme.”

The company is eyeing 12-13% growth ($600m) in Textron Aviation revenues during 2024.

“We think the better than expected guidance for 2024 is likely to be the focal point for Textron today. On Aviation the guidance is similar to our forecasts, and we’ll be interested to hear what the company has to say with regard to projected market demand (and the book to bill) and the supply chain,” said Robert Stallard of Vertical Research Partners in his earnings analysis.

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The increase in segment’s revenue came on the back of from higher volumes and favourable pricing.

“At Aviation, we saw our strongest order quarter of the year with a 12% increase over the third quarter of 2022,” said Scott C Donnelly, chairman and CEO, Textron.

The aviation segment’s profit clocked in at $160m in Q3, up $29m from a year ago, largely due to favourable pricing.

Meanwhile, a $23m favourable impact from higher volume and mix was partially offset by supply chain and labour inefficiencies.

The company’s aviation segment delivered 39 jets and 38 commercial turboprops. Textron Aviation’s backlog at the end of the Q3 was $7.4bn.

“The much-watched aviation backlog expanded by $600m sequentially and we calculate a book to bill of about1.4x,” said Robert Stallard, global aerospace & defence partner at Vertical Research Partners. “The book to bill at aviation has actually improved versus deteriorating, which bodes well for bizjet demand.”

Overall, Textron group’s revenue reported earnings per share (EPS) of $1.35 for Q3, up 27% year-over-year from the same period last year. The company’s revenue grew by 8.6% year-over-year to $3.4bn compared with $3.1bn during the Q3 2022.

“In the quarter, we saw higher overall revenues and net operating profit driven by growth at aviation, industrial and systems,” said Donnelly.

Meanwhile, Bell revenues remained flat at $754m compared to $754m in the same period last year on account of lower commercial helicopter volume, largely reflecting supply chain constraints.

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“The Cessna Citation CJ3 Gen2 is our most comprehensive Gen2 product announcement yet, offering customers proven performance, leading edge technology and an unmatched cabin experience,”  said Ron Draper, president and CEO, Textron Aviation. “As a pilot of the CJ3 series, I appreciate the aircraft’s excellent range, payload and efficiency, along with new productivity and comfort features.”

FlyExclusive has been named as launch fleet customer. “We take pride in being the fleet launch customer for the Citation CJ3 Gen 2, building on our decades-long relationship with Textron Aviation,” said Jim Segrave, founder, chairman and CEO of flyExclusive. “I am excited that our fractional customers will get to invest and travel in the top light jet in the world.”

For pilots, aircraft has Garmin Autothrottles, Optional Enhanced Vision System (EVS), a touch screen interface and new GDL60 aircraft connectivity. They also get 4.5 inches of extra legroom. Passengers may notice improved steps and lighting. There are also skylights in the lavatory, and a new optional sink and vanity design.

Like the CJ3+, the Citation CJ3 Gen2 seats 10 passengers. It has a maximum range of 2,040 nm.

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This follows supplemental type certification approval by the FAA anticipated in the first half of 2024. The G5000 avionics upgrades the cockpit and addresses the evolution of FAA airspace, while also offering a lower cost of operation.

“Garmin’s G5000 integrated flight deck is already a popular modification for Cessna Citation Excel and XLS customers because it offers unmatched situational awareness, lower cost of operation and an improved in-flight experience,” said Brian Rohloff, senior vice president of Customer Support. “We look forward to expanding this upgrade option to additional Citation operators as we continue to design and deliver the best customer experience and support our customers through the entire life cycle of their aircraft.”

Garmin’s G5000 avionics suite is designed to provide pilots with an intuitive and modern flight deck, including three landscape-oriented displays with split-screen capability, intuitive touchscreen controllers, and geo-referenced Garmin SafeTaxi airport diagrams. The SafeTaxi database provides operators with better situational awareness while taxiing at airports within the database by displaying hangars, terminals, towers, taxiways and other signs.

The G5000 upgrade installation on the Citation XLS+ and XLS Gen2 includes a fully digital Automatic Flight Control System (AFCS), offering precise performance throughout the aircraft’s flight envelope.

The system also includes Emergency Descent Mode (EDM) as a standard feature. In the event an aircraft loses cabin pressurisation, EDM is capable of automatically descending the aircraft to a preset altitude without pilot intervention. Underspeed protection (USP) allows the autopilot to assist with airspeed management, while also enabling fully coupled go-arounds, greatly reducing pilot workload. Additionally, operators gain access to more airports and lower approach minimums throughout the world as the G5000 has PBN/RNP 0.3 with LPV/APV approach capability.

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The new propeller, which features four aluminium swept blades and a 105-inch diameter, achieved FAA type certification in July 2023.

“The new McCauley C780 offers King Air customers increased performance, a quieter cabin and greater efficiency,” said Heidi McNary, vice president and general manager, McCauley Propeller Systems. “For 85 years, McCauley has been committed to delivering creative solutions and driving customers forward with their pioneering designs and strategies. We look forward to continuing to support the future of flight and legendary aircraft like the Beechcraft King Air.”

The Textron Aviation Service Center installed the first C780 propeller on a Beechcraft King Air 350 owned by ExecuJet Charter Service. Located in Florida, ExecuJet provides concierge private air charter services to customers seeking flexibility and efficiency.

“I have always had tremendous reliability and service with the McCauley product line,” said Robert Jones, director of Maintenance at ExecuJet Charter Service, Inc. “We couldn’t be more thrilled. The aircraft is going to look and perform incredibly well.”

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The expansion enables Textron Aviation to streamline production processes by centralising machinery within the space to support efficient interior manufacturing for its entire line-up of Cessna Citation jets, as well as Beechcraft King Air and Cessna SkyCourier turboprop aircraft.

“Our highly skilled team designs each interior to create a customer’s ideal aircraft environment and experience, such as relaxation, innovation or productivity,” said Christi Tannahill, senior vice president, Customer Experience. “This expansion supports our team in exceeding our customer’s expectations with unmatched quality, craftsmanship and efficiency.”

The larger footprint allows the company to support new models like the Cessna Citation M2 Gen2, CJ4 Gen2, Cessna SkyCourier, Beechcraft King Air 360 and King Air 260. Two products currently in development — the Cessna Citation Ascend and the Beechcraft Denali — will also be supported at the IMF facility once they enter into service.

“At Textron Aviation, our commitment to excellence, innovation and the future of flight is leading the aviation industry,” said Brad White, senior vice president, Operations. “Whether our employees work on the tip or the tail of an aircraft, or whether they’re part of the engineering, design, delivery or servicing of an aircraft, they join in our legacy of success.”

Consistent with the company’s commitment to sustainability, the facility upgrades include energy-saving LED lighting and high-efficiency systems. Construction on the expansion is expected to be completed mid-year 2024.

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Agriculture accounts for a quarter of Brazil’s economy and with some economists forecasting that this is the start of a long-term commodities boom it could soon be more. The hottest new Brazilian telenovela is Terra e Paixão (Land and Passion) where a teacher takes over her murdered husband’s farm.

When you think of South American agriculture companies buying aircraft you probably picture farmers buying crop dusters like Embraer’s Ipanema. The largest agri companies think a lot bigger. JBS, a Brazilian meat producer, had sales of R375bn ($71bn) last year, for example, and has 260,000 employees in more than 20 countries. Large multinationals like this are increasingly looking for options.

“We are seeing strong demand in Brazil. The economy is strong and we are seeing a lot of interest from agribusiness as well as services and retail,” said Stephen Friedrich, chief commercial officer, Embraer talking to CJI in Brazil last week. “We see buyers looking to fly within Brazil and a lot of demand for the Praetor 600’s ability to fly from São Paulo to Miami. A lot of businesses appreciate that.” (Pictured is a Praetor 600, courtesy of Embraer).

The atmosphere at LABACE in São Paulo last week was visibly upbeat. With all the manufacturers attending seeing interest from potential customers. “It is a great time for business aviation in Latin America, we are very excited about Brazil,” said Marcelo Moreira, vice president sales, Textron Aviation.

Moreira says they are seeing strong demand across the Textron range. Textron has delivered more than 250 new turboprops and jets to Brazil over the past five years. He adds: “It is a great market and we have invested a lot into it.”

Brokers are seeing similar interest for pre-owned aircraft. “Agribusiness is our tech industry,” says one Brazilian broker, “but we are also getting a lot of demand from other sectors post-Covid just like in the US.”

Getting aircraft into the country is still complicated. The World Bank used to publish a ranking of the easiest countries in which to run a business. (Ironically it stopped in 2020 due to ethical concerns about the data.) In its last report Brazil ranked 124th.

But Brazil came 184th for ease of paying taxes. In 2019 the World Bank estimated that it took companies an average of 1,500 hours per year (or 187 workdays) to comply with Brazilian tax laws. A Singaporean company would expect to spend just 64 hours.

Tax can be charged at federal, state, and municipal levels and each can have different approaches. There are a lot of taxes involved in importing aircraft – state VAT, import tax, industrial products tax and others. In 2012 Brazil’s tax authority famously seized a number of N-registered jets, but these problems are in the past.  

Large trading companies like Timbro, Comexport, Razac, Sertrading and Savixx have simplified imports and are key players in the market. They were some of the biggest exhibitors at LABACE this year.

Politicians across all the major parties are committed to simplifying the tax system. The lower house approved the first draft and this is now in the Senate. Lawmakers are hoping to have reached agreement by the end of the year although it will take years to come into effect.

“The whole concept of simplification is a good one, but for now the only thing we know for sure is that the Senate will make changes – nothing is finalised yet,” says João Paulo Servera, who heads the aviation group at law firm Veirano Advogados.

One benefit of the import taxes is that aircraft that have been brought in tend to stay in the country. But the real reason they stay is that companies with aircraft in Brazil have a real advantage.

“Brazil is similar in size to the US, but has a lot of room to improve with airline connectivity. We are seeing a lot of businesses looking for aircraft to give them flexibility and efficiency,” says Textron’s Moreira. 

Businesses are waking up to business aviation and smelling the coffee. 

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