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Russ Meyer,
Chairman and Chief Executive Officer, Cessna Aircraft Company

"1996 will mark our tenth consecutive year of growth"

As we enter the final month of the year at Cessna, I could not be more pleased by the progress we have made in 1996. This will mark our tenth consecutive year of growth in both the Citation and Caravan product lines. We have delivered a total of more than 750 Caravans - a milestone we passed during the first quarter - and we're continuing our dominance of the light and mid-size business jet markets as well. We will deliver about 130 Citations this year, the seventh straight year we've exceeded 100 deliveries. We now have nearly 2,400 Citations operating in 75 countries around the world. The Citation fleet has surpassed 10 million hours of flight and we expect to reach 3,000 deliveries by the first year of the next century. By concentrating our investments in recent years on the business jet segment, we have been able to develop the broadest product line in the industry.

The CitationJet has been a wonderful entry-level business jet. We've delivered more than 160 since it was introduced less than four years ago. In 1996, we'll deliver 50 CitationJets and the strong backlog continues with plans to increase that to 60 airplanes in 1997.

The Citation Bravo was certified in September and we'll make the first customer delivery before the end of the year. It just seems to get better and better as we build hours on the airplane. The Bravo climbs to high altitude almost as quickly as the Ultra and its maximum cruise speed has increased to 403 KTAS. With such great overall performance, and with a new landing gear and Primus 1000 flight control system, we believe the Bravo will be a very popular business jet.

The Ultra continues to be an exceptional aircraft. I am obviously biased, but to me, it is the best all-around value we've ever achieved at Cessna. It climbs to altitude and cruises between 420 and 430 knots. It's reliable, has terrific short field performance and operates at a lower cost per mile than most turboprops. Sales continue to be strong and we'll deliver our 400th Model 560 (which combines the Citation V and the Ultra) in December.

The Citation Excel flew for the first time on February 29th. It has been a world class success with well over 100 orders already booked. We completed a very successful tennation tour with the Excel mock-up that generated several orders and flew the first production airplane in July. The two aircraft in the test program have accumulated more than 500 hours so far and we will certify and deliver our first Excel at the end of next year.

And finally, the Citation X has officially entered service. We received FAA certification in May, after it had already circled the globe and accumulated more than 3,000 hours of flight experience on three test airplanes. We delivered the first Citation X to Arnold Palmer in August. We're on track to deliver eleven Citation Xs to customers by the end of the year. It is an aircraft that brings a whole new level of performance to the business jet industry. It is exceptionally fast - that's well-known - but what's not so well known is the X's superb operating economy. For example, at FL 450, it burns less than 1,700 pounds per hour while cruising at more than 500 knots. At FL 490 that fuel efficiency is even more impressive. The fuel burn drops to less than 1,400 pounds per hour at Mach .86.

But the Citation weren't the only airplanes surpassing milestones in 1996. We continued to see strong acceptance of the Caravan as well. In February, we took the 500th Grand Caravan to the Singapore Air Show and in March, the 750th Caravan entered service. Federal Express continues to expand ist use of the Caravan in its package delivery system. More than 300 have been delivered to FedEx since the airplane's introduction in 1985.

We are grateful to be having another good year - one that could be the best ever. We're projecting deliveries of about 130 Citations and 100 Caravans. We also continued a steady trend of increasing employment that has been going on for the past eleven years. We've seen Cessna employment increase from 3,000 in 1986 to nearly 8,000 today. With luck, that number should exceed 10,000 by the year 2000.

But as important as they were, the successes in our turbine aircraft segments and increasing employment weren't the only positive news at Cessna in 1996. This year we also made a significant contribution in securing the future of our industry when we dedicated our new $ 40 million single engine assembly facility in the new light aircraft capital of the world, Independence, Kansas.

On July 3rd, we hosted more than 6,000 people for a grand opening celebration that marked another important step in the revival of single engine piston aircraft production at Cessna after a ten-year hiatus. We plan to roll out our first Model 172 in late November and the 182 and 206 will follow next year. We expect to deliver 1,000 single-engine aircraft in 1997 and 2,000 in 1998. I wouldn't be at all surprised to see us add the 172RG and 182RG to the line and produce 3,000 aircraft per year by the year 2000.

We all know that the Wright Brothers first flight in 1903 was the foundation for the first century of aviation. I believe that passage of the General Aviation Revitalization Act of 1994 created the foundation for the second century of aviation in this country. Light aircraft is where aviation begins. We learn to fly in 172s, not Citations. And thousands of young men and women interested in making their careers in aviation used to start with the general aviation manufacturers, fixed base operators, and flight training centers. With the re-emergence of this segment of the business we can all begin providing opportunities to these young people again.

We're to undertake a number of programs to promote and expand flight training. Cessna and the entire general aviation industry are working to increase the current level of barely 50,000 student starts to over 100,000 in 1997 by emphasizing the joy of flying and the unique benefits of general aviation. GA Team 2000 is a joint program among the manufacturers and trade organisations designed to revive the grass roots of our industry. The best news of all in this arena is the excitement and enthusiasm we've seen among customers and prospects. Cessna announced the pricing on our 172s and 182s at the annual EAA Convention in Oshkosh in August and the response was tremendous. We had almost 500 option holders for new single engine airplanes before we even announced the prices and we've been converting them to firm orders at a rapid rate ever since.

So we're looking at another strong year in 1996, one in which we expect Cessna to exceed the $ 1 billion mark in sales for the first time in 15 years, and we're looking ahead to a record-setting 1997. There are regulatory and legislative challenges to overcome and competition remains aggressive, but we're confident and encouraged by the solid demand and positive response to our products in all the segments of the market in which we participate. We're grateful to our loyal customers for making this success possible and we're committed to earning their continuing support.

Last updated November 17, 1996