New Business Turboprops 2017

Financial drag appears to be slowing several new business turboprop programs, with the development/certification schedules sliding to the right year-over-year. While the demand for business jets has fluctuated over the past five years, demand for new business turboprops has been remarkably steady, according to data from the General Aviation Manufacturers Association (GAMA), with sales of new turboprop singles averaging 475 aircraft between 2012 and 2016 and sales of twins averaging 119. But when you break down those numbers, most of the sales are highly concentrated within a small group of OEMs, and that makes entry into the market by new players difficult. 

Run the numbers and you’ll see why. In any given year, aerial application aircraft built by Air Tractor and Thrush account for about one-third of turboprop single production. Take that away, and you're left with 250 to 300 new turboprop singles a year. Five OEMs traditionally account for virtually all of that market: Textron Cessna, Daher, Pilatus, Piper and Quest. Collectively, those OEMs accounted for 254 of the 490 turboprop singles (including aerial application aircraft) produced in 2012 and 299 of the 467 produced last year, according to GAMA. There is even a great deal of concentration within these numbers when you consider Cessna and Pilatus collectively accounted for 169 new turboprop singles in 2012 and 175 last year.

When it comes to twins, Textron’s Beechcraft has a virtual monopoly, with the King Air line accounting for 89 of the 94 twin turboprops manufactured in 2012 and 106 of the 115 produced last year. This leaves scant room for new market entrants unless they are either niche players, as in the case of the Viking Air Twin Otter 400 or Quest Kodiak, or they can bring to market such a compelling product at such an attractive price that they manage to capture market share from other OEMs.

Finally, consider that there is still an ample supply of used turboprops and no shortage of cost-effective upgrades to give these aircraft like-new, and in some cases better-than-new, performance. Given these market dynamics, it comes as no surprise that new turboprop market entrants often have tough sledding; making a compelling business case and attracting sufficient capital to execute a new turboprop program can be an extremely difficult proposition. As we see again this year, many such programs are struggling to get airborne and are in search of more runway.