Honeywell Forecasts 7,600 New Business Jet Deliveries Over Next Decade Valued At $248 Billion
"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
Key findings in the 2019
- 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
- New jet purchase plans decreased 2 percentage points in
North Americain 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'spurchase 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'sshare of global demand over the next five years is estimated to be 19%.
- 21% of the sample fleet in
Latin Americais 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 Brazilin 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 Americawill represent 7% of the total projected business jet demand over the next five years.
- Operators in
Asia Pacificreport new jet acquisition plans for 15% of their fleet over the next five years.
- Based on the expressed level of purchase plans,
Asia Pacificwould represent a 10% share of global new jet demand over the next five years.
- About 40% of respondents in
Asia Pacificplan to schedule their new purchases within the first two years of the five-year horizon, the highest proportion of all the regions.
- 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 Eastand Africais 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
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
- 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
This release contains certain statements that may be deemed "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the
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