Good News From Gulfstream

Gulfstream Aerospace executives are optimistic that the rebound they began seeing in the third quarter has carried into the final months of 2020 and that the company is poised to be further buoyed by positive developments surrounding COVID-19 vaccines.

“Demand is returning, which is encouraging for us,” said Scott Neal, senior vice president for worldwide sales for Gulfstream, during a recent videoconference with reporters. The Savannah, Georgia–based business jet maker saw activity begin to pick up by early July, and that trend has continued, Neal said. “We had a very solid third quarter for sales activity, and we’re seeing some of that activity continue here into the fourth quarter.”

The improvement has been on several fronts, he added. “We’re having quite a few more sales discussions now than we did earlier in the year. So, our pipeline is very robust. We’re flying more flight demonstrations, we have more factory visits—all encouraging signs to me, that at least for Gulfstream, customers are engaging, and we’ve got some very strong prospects for sales opportunities certainly for the end of the year, but into next year as well.”

Gulfstream president Mark Burns echoed those sentiments, saying customers remain cautious but are more upbeat than they were earlier in the year. Burns further said he was encouraged about 2021, particularly given the recent advancements in vaccine development. “Our customers now see that there is an end in sight,” Burns said. “If the vaccines are as effective as they appear to be, this is a moment where we feel great optimism of getting past the virus.”

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Further, Gulfstream is seeing an uptick in activity not only from its existing customers but also from new clients, Burns noted. “In the conversations that I’ve had in the last six months, there are a lot of new buyers,” he said. “For all the tragedy that this pandemic has created, it has been an accelerant for a lot of businesses and many of those businesses are new businesses [to us].”

Additionally, the trend of working from home from anywhere has created a “whole new generation of companies” that need to travel, Burns said.

Gulfstream had entered 2020 with a “great deal of momentum,” he noted. The company had just announced the flagship G700 and had a flurry of activity with the aircraft and had come off a strong fourth quarter in 2019. But it began to feel the impact of the coronavirus as early as January with its base in the Asia-Pacific region, Burns said. “We actually started to see flying in China slow down in December [2019] and in early January.” That impact then spread into Europe and the U.S.

“Things did change...rapidly,” Burns noted. “I think there was such great fear and uncertainty about the virus that it did cause a great deal of pause with our customers.”

However, he added, “As you move forward to where we stand today, I think there’s a great deal more understanding about how to treat the disease…about how to protect ourselves.”

The pandemic also spurred novel approaches to enable the company to continue to operate during the pandemic, he said. “It was unusual, some of the things that we had to do,” ranging from screening and limiting visitors, to restricting travel and coordinating remote working for some 5,000 employees.

Since then, “we reaggregated those employees back into the business,” Burns said. “But we’ve also found that we can conduct business in a remote manner fairly successfully.” This has included communicating with customers directly through remote channels, use of some robotics in manufacturing, and designing aircraft through remote tools. 

At the same time, Gulfstream has continued to demonstrate aircraft around the world. “There's a lot of protocols that go along with the ability to do that. We've continued to meet with customers in person with the proper precautions. I will tell you as a business, we've continued to operate very successfully.”

Burns further anticipates that the company will be able to deliver aircraft in the fourth quarter without much interference from virus-related issues. “I’m optimistic we’re not going to repeat what occurred in the second quarter when we just couldn’t get deliveries due to travel restrictions or concerned customers,” he said. “I think most people have worked their way through that.”