Honeywell International Incorporated's aerospace unit released it's business jet forecast and predictions on a recovery of the business jet market. The company expects a later recovery than originally thought, pushing it to 2012 and stating in a Reuter's article that "disappointing rates of global economic recovery have forestalled order rates and softened the 2011 outlook."
According to numbers published earlier by the General Aviation Manufacturers Association (GAMA) 2009 was one of the worst years for deliveries of corporate aircraft with a large decline still noted in the first 6 months of 2010.
For the 10 year period from 2010 through 2020, Honeywell is expecting total delivers of business jets to exceed 11,000, with sales total in excess of $225 billion. This would indicate a 10% increase of the prior 10 year period ending 2009. For 2010, Honeywell estimates total deliveries will be down 16-17% from 2009 levels at 675-700 business jets and also believe that 2011 deliveries will remain below 700.
This report was released prior to NetJets announcement that it was entering into a purchase agreement with Embraer for 125 Phenom 300 light business jets; however, as the report is based on surveys sent to 1,100 flight departments and airplane manufacturers, it may be assumed the estimates include this new, unexpected order by NetJets.
As for international demand, according to the report, Rob Wilson, President, Business and General Aviation, Honeywell Aerospace stated 'This year, operators outside North America have become more cautious about the strength and pace of the recovery. While they are still looking beyond the current economic climate and anticipating a return to improved business conditions, they have tempered near-term expectations and buying decisions, as reflected in the current delivery forecast.
“These more cautious international purchase plans have resulted in overall five-year demand for new jets resembling levels similar to those we saw in the 2007-2008 time frame, but still above those seen in the post 9/11 recovery cycle.
“Despite a torpid recovery, there have been relatively few program cancellations and delays,” continued Wilson, “so the pipeline of new high-value models supporting long-term growth remains strong. Our survey indicates that international demand will still remain significant and contribute to longer-term growth.
“The retail value of jet shipments has not declined to the same extent, registering mid-to-high single digit erosion this year, due to the relative strength of large cabin aircraft. The industry should begin another period of expansion by 2012,” Wilson said.
For the full report with a breakdown of expectations for various global regions, as well as the methodology used in the Honeywell report, see the full document here.
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