Gulfstream: Supply chain issues stabilising as G700 deliveries down
February 4, 2025
Despite its aerospace business sector delivering a “stunning” 36.4% quarterly increase in revenue, General Dynamics revealed in its Q4 2024 earnings call, deliveries of the new G700 were – as expected – lagging earlier projections.
Chairman and CEO of General Dynamics, Phebe Novakovic, explained that Gulfstream’s parent company saw a “dramatic increase in deliveries of in-service airplanes in the quarter”. This stood at 47 vs the 28 delivered in Q3 2024, with revenue growth driven by the delivery of 25 more aircraft than in 2023. Nevertheless, despite posting a 30.3% increase in earnings quarter-over-quarter, aerospace revenue and earnings for the quarter and full year were inevitably impacted by the delivery of less G700s than planned.
Having earned FAA type certification for the all-new aircraft in March 2024, Gulfstream had initially anticipated deliveries of between 50-52 units a year, more or less evenly divided over the last three quarters. Although 11 of the planned 15 for Q2 were delivered, only four of the 15-16 planned for Q3 – and 15 of the expected 27 units for Q4 – were delivered.
Gulfstream’s previously detailed problem of late engine deliveries – necessitating the induction of aircraft into completion centres prior to engine integration, something which required a “significant amount of repaint” – represented “a significant deviation from our process and proved to be detrimental to both cost and schedule,” elaborated Novakovic.
This “rational decision at the time turned out to be quite troublesome,” she continued, adding that “the implications of [inducting aircraft into delivery or completion without engines] didn’t become clear until a bit later”. However, Gulfstream is confident it is now “largely receiving engines to schedule”.
Acknowledging the highly customised interior elements that also delayed the delivery of certain G700 units, Novakovic added that the quality escape of an unspecified component late in Q3 (necessitating additional test flights) is a problem “in many respects also behind us”. However, although the supply chain is “now performing much better to schedule,” she cautioned that Gulfstream “continue to be surprised by some quality escapes”.
“From a production point, we’re in regular order,” she concluded, optimistically. “On the completion side, we’re getting there, but were just not there yet. But we’re getting there”.
