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$230B in new business jets expected from 2011-2021

$230B in new business jets expected from 2011-2021

Sales of new business jets are soaring, if Honeywell Aerospace figures are anything to go by. No one's surprised most of it is coming from the MEA and Asia.

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October 10, 2011 1:56 by



New business jets valued at about $230 billion will be sold and delivered from 2011 through 2021, according to Honeywell Aerospace’s 20th Annual Business Aviation Outlook.

This figure represents an approximately two percent increase in total expected industry sales value, compared to the prior ten-year horizon Honeywell forecasted in 2010.

Here are some other key findings in the report:

  • For 2011, Honeywell Aerospace estimates deliveries of 600-650 new business jets, down approximately 15 percent from 732 in 2010 due to continued slow global economic recovery.
  • While 2012 deliveries are expected to be below 700 airframes, Honeywell anticipates higher delivery levels than in 2011.  While five-year buyer interest remained steady versus 2010, based on the reduced economic growth outlook and this year’s survey responses, the industry appears to be positioned to begin another period of expansion in 2012, which is consistent with Honeywell’s current industry outlook.

Asia, Africa and Middle East Expectations

  • Asia, Africa, and Middle East regions ranked the highest in purchase expectations regardless of the economic environment.
  • Asia, Africa and Middle East purchase plans have moved up from 2010 levels and once again exceed the overall world average.
  • Purchase expectations of nearly 38 percent recorded in Africa and the Middle East were up almost nine points from 2010 levels.
  • Planned purchases, if realised, will result in more rapid regional growth in Asia and the Middle East and Africa, than is expected in North America, Europe or on a worldwide basis.
  • Confidence in Asian and Middle Eastern economic growth in the intermediate and long-term remains high, boosting interest in longer-range, larger aircraft with better operating economics.  Concerns over new duty time restrictions, tax and regulatory compliance issues were voiced again this year.

Honeywell surveyed more than 1,500 flight departments around the world for its annual business aviation outlook.

“The level of caution continues to be tied to concerns specific to each region,” said Rob Wilson, president of Honeywell’s Business and General Aviation business unit.  “We noted over the last two years that the timing of planned purchases in the five-year window was heavily shifted in most regions to the post-2010 timeframe.  That still remains the case, with roughly 80 percent of planned purchases timed for 2013 or after.”

One bright spot is the earlier demand timing coming from Brazil, Russia, India and China (BRIC) countries and the Middle East.  Acting on these purchase plans in 2011 and 2012 is critical to providing the industry momentum as current backlogs will not sustain delivery levels indefinitely despite recent book to bill ratios exceeding one at some manufacturers.

“This year, operators outside North America displayed mixed attitudes about the strength and pace of this nascent recovery,” added Wilson.  “They are still looking beyond the current economic climate and anticipating a return to improved business conditions, but some regions have tempered near term expectations and buying decisions as reflected in this year’s forecast.”

SUMMARY

Honeywell predicts deliveries will continue to cycle down in 2011, but will post modest gains in 2012.  The peak-to-trough decline expected to be in the range of 40 to 45 percent on a unit basis and about 33 percent on a value of aircraft delivered basis, reflecting the sales strength of large cabin models through the downturn (and corroborated by survey results in both 2010 and 2011).  In 2012, a combination of deferred delivery orders already in hand for some new models entering service and somewhat improved rates of global economic growth will result in a…

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2 Comments

  1. business jets on January 12, 2012 8:55 pm

    I’ll immediately grab your rss as I can’t to find your email subscription hyperlink or newsletter service. Do you have any? Please allow me realize so that I may subscribe. Thanks.

     
  2. p.deleon on January 17, 2012 8:16 am

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