On the Record with
GARY HAY, CEO, CESSNA AIRCRAFT COMPANY

Cessna Switching to Service Emphasis

Cessna CEO Gary Hay is building to support huge fleet.

"We continue to try to balance the need for growth with prudence," says Cessna Aircraft CEO Gary Hay.

"We know that we could go out and build more capacity. We also know that at some stage we will get the opportunity to be not so enthusiastic."

Some sort of downturn, in other words, is inevitable, especially given the 'unprecedented' business aviation boom of the past five to seven years. "We have attempted to be very cautious and resourceful with our capital expenditures," says Hay. Most of Cessna's recent investments have thus been aimed at customer service and support enhancements.

Don't get the idea that they're wringing their hands at Cessna, nor sitting on them. Cessna's order backlog just before NBAA was about $5.7 billion, Hay told Show News-some 730 Citation aircraft. The firm is completely sold out not only through this year but through 2001 as well, and for some models is sold out several years beyond that. A new joint venture company with TAG Aviation, called CitationShares, strengthens Cessna's position in the fractional field.

Cessna has invested about $100 million in new facilities over the past five or so years, and has just disclosed plans to spend $28 million more on a brand new service center at Orlando, FL. It will be Cessna's biggest, aside from its Wichita headquarters.

Coming on line in time for NBAA is a new Internet initiative dubbed CPDXpress (for Cessna parts distribution express). Cessna has recently created the position of director, e-business, a post filled by Tom Aniello, who reports directly to Hay.

Cessna is maintaining tradition with new training initiatives for young pilots-the would-be Cessna Skyhawk pilots of today who will be the Citation pilots of tomorrow.

"We continue to be committed to growing that grass-roots piece of business," says Hay. "It is our privilege and responsibility to invest in the infrastructure of our business and a large part of that is pilots." That's one reason Cessna jumped with both feet back into single-engine pistons when product liability issues were finally cleared up by federal legislation.

Another reason is that Cessna will sell upwards of 980 single-engine piston aircraft from its plant in Independence, KS, this year. A block change improvement to Cessna's line of Skyhawk, Skylane and Stationair singles -- including an option for more capable avionics --is being promoted here at NBAA, as is a new turbocharged Skylane. Also aimed at the new pilot is a CD-ROM computer-based instrument training program launched this past summer, complementing a basic course introduced two years ago.

With the exception of a block change making the Citation X more short runway-capable, Cessna's making no new business jet announcements at this year's show, but it hardly has to. There are already more than 3,100 Citation business jets operating in more than 75 countries. Three new ones were certified this year: the Citation Encore, the first of which was just delivered; the CJ2, the first of which will be delivered in the coming weeks; and the CJ1, the first of which was delivered in late March. The 40th CJ1, representing the 400th Model 525, will be delivered after NBAA 2000.

Cessna this year opened a service center with 40,000-square-foot of hangar space in Sacramento, CA, replacing a 12,000-foot service center dating from 1973. Other new and newly upgraded Cessna centers are located at San Antonio, TX and Paris, France-the first such Cessna-owned center in Europe.

Cessna last month broke ground on an $11 million Citation parts distribution center at Wichita, which will help fulfill orders processed via the new CPDXpress Internet service. It'll consolidate parts functions now spread out at three Wichita buildings, and be able to handle large parts for the company's newest, largest Citation X and Sovereign jets.

Cessna will break ground by year-end on its new 158,000 square-foot Citation service center in Orlando, FL. It will be about five times bigger than the facility there now, which will remain open, possibly as a VIP center. The new service center will be located at a new site at the opposite end of the Orlando International Airport from the existing operation. It's to be completed in early 2002.
"Our customer support has been excellent," says Hay. "But we're going to take it to a new level."