LAS VEGAS, Oct. 20, 2019 /PRNewswire/ -- The business
jet industry is expected to see strong growth in the short to
medium term, supported by several new airplane models coming to the
market, according to Honeywell's (NYSE: HON) 28th annual Global
Business Aviation Outlook. Released today, the Global Business
Aviation Outlook forecasts up to 7,600 new business jet deliveries
worth $248 billion from 2020 to 2029,
down 1 to 2 percentage points from the 2018 10-year forecast.
"Production ramp up on many new business jet platforms are
expected to lead to a 7% increase in deliveries in 2020, following
a strong projected growth in 2019 over 2018 aircraft deliveries,"
said Heath Patrick, president,
Americas Aftermarket, Honeywell Aerospace. "We are confident that
these new and innovative aircraft models will support solid growth
in the short term and have a continuing impact on new business jet
purchases in the midterm and long term."
Key findings in the 2019 Honeywell global outlook include:
- Operators plan to make new jet purchases equivalent to about
17% of their fleets over the next five years as replacements or
additions to their current fleet, a decrease of 3 percentage points
compared with 2018 survey results.
- Of the total purchase plans for new business jets over the next
5 years, 35% are expected to occur in the first two years of the
survey, with 57% of purchase plans realized by year three. This is
5 percentage points higher than last year's survey.
- Operators continue to focus on larger-cabin aircraft classes,
from large cabin through ultralong-range aircraft, which are
expected to account for more than 71% of all expenditures of new
business jets in the next five years.
- The longer-range forecast through 2029 projects a 2% to 3%
average annual growth rate in line with expected worldwide economic
growth and supported by the current and expected introduction of
new models throughout the forecast period.
- Purchase plans for used jets are significantly higher in this
year's survey. Operators worldwide indicated that 32% of their
fleet is expected to be replaced or expanded by used jets over the
next five years, up 8 percentage points compared with survey
results from 2018.
- The main factors that influence purchasing decisions are
aircraft performance, followed by brand experience, cabin and
range. Survey participants also cited direct operating costs and
customer support experience as elements that will influence their
decision on which aircraft to buy.
Breakdown by
Region
North America –
Compared with last year, new aircraft
acquisition plans in North America
are slightly lower.
- New jet purchase plans decreased 2 percentage points in
North America in this year's
survey. 15% of the fleet is expected to be replaced or supplemented
with a new jet purchase over the next five years.
- About 36% of operators responding to the survey plan to
schedule their new purchases within the first two years of the
five-year horizon. This is stable compared with last year's survey,
and in line with the worldwide average of 35%.
- Purchase plans for used jets are significantly higher, up 11
percentage points when compared with last year's survey. A full
one-third of the fleet is expected to be replaced or supplemented
with a used jet over the next five years. That is the highest
percentage measured in the past five years of the survey.
- An estimated 60% of projected worldwide demand for new jets
will come from North American operators over the next five
years.
Europe –
Operators are facing a slow economic growth environment and the
uncertain effects of Brexit, and new jet purchase plans decreased
in this year's survey.
- Europe's purchase expectations
decreased this year to roughly 28%, a decrease of 5 percentage
points compared with last year's results. This result is in line
with the previous five-year average of 27% measured in the
region.
- Planned timing for European purchases in the first two years of
the survey are at 34%, just 1 point below the worldwide average of
35%.
- Based on this year's survey results, Europe's share of global demand over the next
five years is estimated to be 19%.
Latin America –
Purchase plans are stable in the region and are lower by only 1
percentage point when compared with last year's results.
- 21% of the sample fleet in Latin
America is expected to be replaced or supplemented with new
jet purchases over the next five years. Purchase plans are stable
in Mexico, but slightly lower from
operators in Brazil in this year's
results compared with last year.
- About 29% of this region's projected purchases are planned
between 2019 and 2021, lower than the worldwide average of
35%.
- It is estimated that Latin
America will represent 7% of the total projected business
jet demand over the next five years.
Asia Pacific
– Despite geopolitical and commercial
tensions, purchase plans are higher in the
region, up by 3 percentage points from last year.
- Operators in Asia Pacific
report new jet acquisition plans for 15% of their fleet over the
next five years.
- Based on the expressed level of purchase plans, Asia Pacific would represent a 10% share of
global new jet demand over the next five years.
- About 40% of respondents in Asia
Pacific plan to schedule their new purchases within the
first two years of the five-year horizon, the highest proportion of
all the regions.
Middle East and Africa – Lower purchase plans were
reported, impacted by political tensions and ongoing conflicts in
the region.
- 12% of respondents said they will replace or add to their fleet
with a new jet purchase, down from 14% last year.
- About 32% of operators responding to the survey plan to
schedule their new purchase within the first two years of the
five-year horizon.
- The share of projected five-year global demand attributed to
the Middle East and Africa is 4%, in line with the historical
range of 4% to 6%.
Flight Activity and Used Jet Market Dynamics
The pace of flight activity in the past year has remained
stable, with survey respondents in all regions except Europe reporting stable utilization in 2019
compared with 2018. In Europe,
operators indicated a lower utilization this year when compared
with 2018.
With respect to the used jet market:
- Survey respondents increased their used jet acquisition plans
by about 8 percentage points, equating to 32% of their fleets in
the next five years. These are the highest purchase plans measured
in the past five years of the survey.
- Used jet purchase plans in all regions were higher, except for
Europe.
- The significant increase in purchase plans for used jets in
this year's survey could indicate an anticipation from respondents
that with the expected increase in new aircraft deliveries in the
short term, a greater number of young used aircraft will be
available for sale at very good prices.
- Survey results show a higher than average transfer of demand
from the new to the used market from operators that typically
purchase new jets. Fifteen percent of respondents indicated they
would transfer from the new to the used market in the 2019 survey.
This is 3 percentage points higher than the survey average from the
past five years.
- Survey results also indicate that close to 30% of purchase
plans for used jets are for aircraft less than five years old, or
for aircraft models that have yet to start delivering.
Making an Impact on Business Decisions
The Global Business Aviation Outlook reflects current operator
concerns, but also identifies longer-cycle trends that Honeywell
uses in its own product decision process. The survey has helped
identify opportunities for investments in flight-efficiency
upgrades, expanded propulsion offerings, innovative safety
products, services, upgrades, and enhanced aircraft connectivity
offerings. The survey also contributes to Honeywell's business
pursuit strategy and helps position the company consistently on
high-value platforms in growth sectors.
Methodology
Honeywell's forecast methodology is based on multiple sources,
including, but not limited to, macroeconomic analyses, original
equipment manufacturers' production and development plans shared
with the company, and expert deliberations from aerospace industry
leaders. Honeywell also utilizes information gathered from
interviews conducted during the forecasting cycle with over 1,500
nonfractional business jet operators worldwide. The survey sample
is representative of the entire industry in terms of geography,
operation and fleet composition. This comprehensive approach
provides Honeywell with unique insights into operator sentiments,
preferences and concerns, and provides considerable insight into
product development needs and opportunities.
About Honeywell
Honeywell Aerospace products and services are found on virtually
every commercial, defense and space aircraft. The Aerospace
business unit builds aircraft engines, cockpit and cabin
electronics, wireless connectivity systems, mechanical components
and more. Its hardware and software solutions create more
fuel-efficient aircraft, more direct and on-time flights and safer
skies and airports. For more information, visit
www.honeywell.com or follow us at @Honeywell_Aero.
Honeywell (www.honeywell.com) is a Fortune 100 technology
company that delivers industry specific solutions that include
aerospace products and services; control technologies for buildings
and industry; and performance materials globally. Our technologies
help everything from aircraft, buildings, manufacturing plants,
supply chains, and workers become more connected to make our world
smarter, safer, and more sustainable. For more news and information
on Honeywell, please visit www.honeywell.com/newsroom.
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