General Dynamics CEO: Gulfstream Will Weather Russia Sanctions

Gulfstream Aerospace will be able to manage through the Russia sanctions, but sister company Jet Aviation could be slightly more affected, Phebe Novakovic, chairman and CEO of parent company General Dynamics, said recently at the 2022 J.P. Morgan Industrials Conference. She explained that aircraft maintenance, charter, and management firm Jet Aviation has more exposure to Russian clients than does Gulfstream.

Since Russia accounts for just 5 percent of Gulfstream’s backlog and with worldwide demand for business jets at record levels, she termed the situation “well manageable within the current demand environment.” However, Novakovic said Jet Aviation’s MRO business “is likely to be impacted as a result of the sanctions, primarily in Geneva, somewhat in Basel, and in Austria. We also expect some impact on the managed airplane business.”

Meanwhile, she maintained that the higher cost of oil—which has been exacerbated by the Russia-Ukraine war, which led to Western countries imposing sanctions on Russia—is not having any noticeable effect on business aircraft demand, sales, or utilization. “We haven't seen any impact,” Novakovic said when asked about this.