Honeywell’s twenty-fourth annual business aviation outlook predicted an extension of the down economic cycle for business jet manufacturers. Business jet deliveries will continue to slow through the remainder of 2010, Honeywell officials said, adding that the first half of 2010 showed a 16-percent decline in deliveries. When compared against the delivery peak year of 2008, 2010 business jet deliveries will drop 40 to 45 percent as they hit bottom in 2011.
In spite of 2010’s first-half discouraging performance, Honeywell’s Rob Wilson—president of Honeywell’s Business and General Aviation division—pointed out that deliveries of large-cabin jets was actually up by six percent for that time frame. But mid-sized jet deliveries were down by a whopping 40 percent, and very light/light jets were down by 15 percent. Even so, Honeywell predicted 2011’s total deliveries will hit bottom, at approximately 700 units—a finding that contrasts with last year’s prediction of a recovery in 2011. In effect, Honeywell has pushed back its predicted recovery one year.
Beginning in 2011, pent-up demand and technological enhancements will create conditions that favor an ever-increasing level of business jet deliveries, which should reach record levels in 2020. Between 2010 and 2020, “up to 11,000 new jets will be delivered, worth $225 billion,” Wilson said. “But operators are cautious about the slow pace of the economic recovery, and that’s why just 30 percent of the operators surveyed for the forecast said they were considering replacing or adding to their corporate fleets this year.” That’s down from last year’s 40 percent level of replacement intentions.
Of those indicating they had purchase plans, 20-percent said they were considering a small-cabin jet, 38-percent favor mid-sized jets, and 42-percent want large-cabin jets. As for Very Light Jets and light jets—which Wilson labeled “personal jets”—Honeywell predicted 2010-2020 sales of 2,600 to 3,100 airplanes worth $9 billion.
Other findings related to the continued importance of the international market. “International demand is still important,” Wilson said. He predicted that 42 percent of deliveries will go to foreign customers this year. That’s down from 2009’s strong 51 percent, but extremely significant nevertheless. In the next five years, Wilson said that regional demand will continue to follow traditional trends—with 58 percent of sales to North American customers, 19 percent to European outfits, 13 percent to Latin America, and 10 percent to the Asian-Pacific and African and Middle Eastern markets.
The top two reasons for buying a new jet? Honeywell said that “more range” consistently ranked among the top two among all regional markets but one—Latin America, which cited replacement of aging airplanes as a top reason.