The global downturn did not prevent aviation manufacturers from attending the fourth annual JetExpo International Business Aviation Exhibition, which was held this September in Moscow. All of the six major OEMs took part in the exhibition. Right at the opening of the show Jets.ru reporters met Mr. Trevor Esling, vice president for International Sales at Cessna Aircraft Company, to ask him a few questions about the event and his views of the Russian business jet market.

Mr. Esling, how would you read the sentiment at Jet Expo show this year?

My initial reaction was the floor was a little bit thinner in terms of the number of exhibitor booths. Hopefully there’s a wide range of aircraft at the static display, but unfortunately there are none exhibited by Cessna as we decided against doing this. Our experience at the last show was that very few people visited the static, because of the heavy Moscow traffic. Driving all the way to Vnukovo-3 is difficult − I did it once and it took three-and-a-half hours, which was more than enough!

It’s a serious problem for Jet Expo and it’s a pity that the static display is situated so far away from the booth area.

It would be nice if you had a facility like at the EBACE in Geneva, where all the exhibitor booths are sited right next to the static display. I’ll be interested to hear how many visitors there are to Vnukovo-3 this year. Obviously, last year the show was very quiet due to the closure of the Stock Exchange. The Russian economy has stabilized over the last 12 months and, although activity is still at a lower level, hopefully the show will be a bit busier than last time.

The interest in this exhibition is still very high. Entering the show we were surprised, seeing many expensive cars and the full car park. It looks like we’ll see many visitors.

I hope so. The reason we’re here is because we believe there’s potentially a big market for our airplanes in Russia. Ironically, perhaps because of everything that has happened here economically over the last 12 months, there may be even more of an opportunity for light and midsize aircraft, which are still fairly new in this market. People now realize that airplanes such as our Citation Sovereign and Citation XLS+ can do the same job as wide-body business jets but cost considerably less. I think this rising awareness will see lighter aircraft such as ours do increasingly well in Russia.

Does Cessna feel that the market has stabilized?

Yes, I would say so. If you look at the flight statistics, the decline in aircraft utilization we saw since last summer has bottomed out and hours have been constant for the last two quarters. The pace of new aircraft order cancellations has also dropped significantly, so we would say that things have stabilized. There has obviously been a very steep decline in fortunes across our industry; in Cessna’s case alone, we’ve seen 50% of our workforce laid off in the past 12 months. Nevertheless, we still expect to deliver around 275 new Citations this year worldwide, which is a significant number we would have been celebrating only a few years ago.

Do you have any figures for Russia?

We don’t really break this information out. We had a few cancellations from Russia, but of course we had cancellations from all around the world – it has been a global phenomenon. You must bear in mind that, at this stage, Russia is still a relatively small market for us. Traditionally, the market here has been geared towards wide-cabin airplanes, such as the Challenger 605. We don’t compete in that area, but, as I’ve explained, we believe that our light and midsize jets are coming of age in the Russian market.

That’s one of the most popular airplanes here.

There’s been a downside and an upside for us in Russia recently. It’s a shame we don’t already sell more of our aircraft here, but as a result we’ve had few order cancellations and feel that market demand is now heading our way.

In December you delivered the first Citation XLS+, didn’t you?

Yes, that’s correct. And the first XLS+ for a European customer was delivered this spring, which went to Lufthansa Private Jet.

The current economic conditions have hit the major aircraft producers and their product development plans. What is the current situation with the Columbus?

We had to take a hard look at the business case for the Citation Columbus because of the economic crisis. Unfortunately, the drop in demand meant we could no longer justify the very heavy investment required – it was going to cost us around 0 million over five to six years to develop, which is a lot of money. It takes a long time to recover investments of that magnitude, so it will be some time before we look again at introducing a wide-body jet with 4,000+ mile range. It really depends on the market, but first we need to return to more normal times and see a general improvement in aircraft sales.

But Columbus would help Cessna’s competitiveness, especially in the Russian market.

We still have a market here for the Citation X, Sovereign and XLS+ – these are current midsize aircraft, not dissimilar to the Hawkers that have been in use here for years. There is existing demand for aircraft of that size and still more potential demand for our smaller jets, like the Citation Mustang and CJ series. We are focused on selling the aircraft we make now, rather than those we might make in the future.

I understand your arguments, but will you continue to upgrade the existing jets?

I am sure we will. If you look at what Cessna does, probably every three years or so we introduce modifications and upgrades. We made some improvements to the Citation CJ2 and it became the CJ2+, and you see similar moves right across our range. You can be sure we will continue to enhance our products in various ways.

As far as I remember, during the last seven years you introduced more than eight aircraft.

Historically, Cessna has been very aggressive in new product development − bringing in new models or taking the existing model and adding something new to it. That practice certainly increases our sales and we will continue to do it, because that is an important part of our strategy.

Speaking about the Mustang and the concept of the very light jets in general, I believe this segment has also been affected by the crisis. Do you agree?

In fact, our Mustang order book has been very good. We’ve had a few cancellations but were always able to resell those airplanes. We have delivered well over 200 Mustangs now.

It looks impressive, especially having these two years of delivery experience.

We’re having a lot of success with the Mustang. It’s performing well in sales terms − probably a little bit better than we thought it would. Now we have Russian certification for the Mustang and look forward to Dexter beginning to take delivery of its order for 20 units, starting next year.

Who are the main customers for the Mustangs?

At the moment Dexter is the principal customer here in Russia. They have already signed their contract and paid their deposits. Some 75% of total Mustang production has been to international (non-US) markets, with the EU and Brazil both markets for us.

A number have gone to companies engaged in air taxi or charter. For example, in the UK there is a company called Blink which operates seven aircraft now, and they’re continuing to take delivery of more airplanes. They seem to be doing ok in these difficult economic conditions. Generally, the market for the Mustang is still pretty good.

Does Cessna offer fractional ownership?

Cessna has a company in the US called CitationAir by Cessna (formerly CitationShares) that has evolved a new approach to fractional ownership, but it is run as a separate business.

One of the most significant issues for the customer is technical support. What kind of technical services do you provide for Russian customers?

The situation with Cessna is the same as with any OEM. The closest facility we have is Jetalliance in Vienna. At this early stage in the development of the Russian market it is difficult to justify the investment necessary to base a service center in the country. There needs to be a certain population of aircraft that require such a facility locally. As and when we do look to establish something we’ll probably start with a line maintenance capability to provide AOG support and service for aircraft around Moscow. It’s only later that we would look to create a permanent maintenance operation here, but first we need more airplanes.

What do you think will emerge as major trends after the crisis (assuming we can say the crisis has passed)?

In Russia, there’s presently a trend towards value for money rather than just ostentatious consumption. People still like the convenience and flexibility of private aviation, but perhaps want that for less money than a large-cabin jet. That’s why I say we expect to see smaller airplanes becoming more popular.

I do believe the market is stabilizing, but the recovery will be long and slow. When improvement comes, all the manufacturers will need time to raise production − it’s going to take us, Pratt & Whitney, Rockwell Collins and everybody else some time to ramp-up again.

Industry commentators expect that we’ll see fewer new aircraft deliveries than in recent years for quite a while, but developing markets such as Russia are places where we might expect to see growing demand.

Coming back to the Jet Expo, what are your priorities here?

We have some Russian customers coming to see us, some of whom are taking deliveries in the next couple of months. When conditions are slow it’s important to have a presence and show everybody that you are still in the market. We have to keep talking with potential customers so that when the things get better we’ll be able to sell them an airplane. It’s important to demonstrate consistency to the market and hopefully that’s what we’re doing. We do have people to meet and talk to whether we sell them an airplane here or not. Touch wood, hopefully we will!