FLUG REVUE July 2005: Interview with Jack Pelton, Cessna

July 2005

VIP Interview

JACK J. PELTON

Jack J. Pelton is Chairman, President and Chief Executive Officer of the Cessna Aircraft Company, the world’s largest business aircraft manufacturer in terms of units. FLUG REVUE discussed with him the state of business aviation.

FLUG REVUE: 2004 saw the return of orders for business aircraft. How did 2005 start for the Cessna Aircraft Company.

Jack J. Pelton: The year 2005 started out with a bang. It started far better than anticipated. We were coming out of a very good year 2004, which was partly related to the bonus depriciation program in the United States. That program ended last year so it had no effect in 2005. One factor for the good start was the improved economy, which increased our sales. Another factor was that we had invested heavily in new aircraft designs, even during the recent downtime. Especially three new products spurred a lot of excitement: The Cessna Citation XLS, the CitationJet CJ3, the Sovereign and the piston singles with the Garmin G1000 cockpit. There is a very good demand for business and private aircraft.

FR: How big is Cessna’s current orderbook?

Pelton: Around six billion US dollars, which is close to our record setting order backlog in 2000.

FR: Is Europe a good marketplace for Cessna?

Pelton: Yes. Actually, in terms of deliveries, Europe is number two after the United States of America. Germany is especially strong despite its economic problems. Between 1995 and today we doubled the Citation fleet in Germany! We have seen real benefits from the strong Euro and the other strong European currencies.
The expansion of the European Union to the East combined with the traffic increase between west and east is another contributing factor to our recent success in Europe.

FR: Which aircraft types are doing well in Europe?

Pelton: The Citation XLS is doing remarkably well. But we don’t want to forget the CitationJet family. And the Citation Sovereign is starting to gain momentum in Europe.
We also have a strong order backlog from Europe for our newest jet, the Citation Mustang, too. It weighs less than 12,500 pounds which is important for the landing fees and route charges in Europe, which are based on the maximum take-off mass of an aircraft. Its range and size and weight makes it an ideal aircraft for Europe.

FR: How important is the Euorpean Business Aviation Show EBACE in Geneva for Cessna and do you participate in this year’s Paris Air Show?

Pelton: No, we will not participate in Paris or in Farnborough. We don’t feel they touch our customer base. They are not a good venue for selling business aircraft because they are very military oriented. At an airshow we want to meet our customers and potential customers.
EBACE is a very good show for us. It allows us to get in touch with our customers and Geneva is a good place for the show. Our maintenance and operation sessions for example, which we offer here in Geneva to European Citation operators are extremely popular. EBACE has made very good progress since it was held for the first time in 2001.

FR: Cessna has a very impressive range of aircraft, from the single engine piston powered Cessna 172 to the world’s fastest civil jet, the Cessna Citation X. These aircraft need to be maintained. Do you have plans to expand your factory-owned service centers?

Pelton: We continue to look at it. We have one factory-owned service center in Paris Le Bourget and we have several authorized service centers in various countries throughout Europe. But another factory-owned service center in Europe is not high on our priority list. We would most likely expand the number of authorized service centers in Europe. We allow these service centers to maintain aircraft of other manufacturers, too, so it helps make it more profitable. But, as I said, we continue to look at what the market demands.

FR:How many factory-owned service centers has Cessna in the United States?

Pelton: We have nine factory-owned service centers in the United States and 28 factory authorized service centers worldwide.

FR: EASA is now in charge of aircraft and equipment certification in the European Union. How is Cessna’s experience with EASA so far?

Pelton: We have a very good experience with EASA so far. We just received certification for the Citation Sovereign, the newest mid-size aircraft on the market, from the European Aviation Safety Agency in April, which allows the Citation Sovereign to be certified and registered in 25 European countries adhering to EASA regulations. We delivered our first Citation Sovereign to Jet Alliance of Austria in late April and several others are scheduled for delivery to the European market.
We are very pleased with EASA and the process which is very beneficial for all countries involved. One of the difficulties of the past was that we had to certify each and every aircraft type individually in each and every country.

Questions by Volker K. Thomalla

From FLUG REVUE 7/2005

Last updated 10 June 2005

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