Honeywell projects deliveries of 7,300 new business jets from 2021 to 2030 valued at $235 billion, down 4% from its 10-year forecast a year ago, the company said in a new Global Business Aviation Outlook.
Despite the delivery decline and short-term impact of the COVID-19 pandemic, Honeywell officials say they do not predict long-term changes to the health of the business jet industry.
Business jet deliveries in 2021 are projected to rise 13% from 2020, a year impacted by the coronavirus crisis, with business jet usage recovering to 2019 levels by the second half of 2021, said Shantanu Vaish, Honeywell Aerospace director of strategy and industry marketing.
In a survey of more than 1,050 nonfractional business jet operators, 80% of respondents say their future purchase plans have not been affected by the pandemic. Five-year purchase plans for new business jets are largely unchanged from a year ago, Vaish says.
“Business jet usage is expected to rebound to 80% to 85% of 2019 levels in the fourth quarter of 2020 and fully rebound by the middle of 2021, indicating demand for business jet travel is returning after the global pandemic caused a slowdown in the industry earlier this year,” said Heath Patrick, president of Americas Aftermarket, Honeywell Aerospace.
Operators plan to make new business jet purchases equivalent to about 16% of their fleets over the next five years as replacements or additions to the current fleet, the survey says.
Among the buying plans, 30% are planned for over the next two years, Vaish said, five percentage points lower than last year’s survey, mainly due to near-term uncertainty.
Operators continue to favor large-cabin aircraft classes. Large cabin aircraft through ultra-long-range aircraft are projected to make up more than 70% of all new expenditures of new business jets over the next five years, the forecast says.
Used jet purchase plans show a moderate decline, with operators saying they expect 25% of their fleet to be replaced or expanded by used jets over the next five years. That is down six percentage points compared to 2019 survey results.
The majority of operators, 82%, expect to operate their business jets less frequently in 2020 compared to a year ago.
Honeywell’s survey results are “relatively encouraging” for business jets, said Jefferies equity analyst Sheila Kahyaoglu. Jefferies forecast predicts business jet deliveries to decline 32% to 442 aircraft in 2020, then rise 15% to 510 in 2021. (Jefferies forecast excludes smaller airframers, such as Pilatus, which Honeywell includes.)
Deliveries in the third quarter of 2020 are tracking at 98 units compared to Jefferies estimate of 120, with third quarter deliveries at four of the five major manufacturers down from projections. By comparison, the five, Bombardier, Cessna, Dassault, Embraer and Gulfstream, delivered 151 business jets in the third quarter of 2019.
In North America, aircraft acquisition plans remain unchanged from a year ago, with 15% of the fleet expected to be replaced or supplemented with a new jet purchase over the next five years, with 32% of the operators planning to schedule their purchases over the next two years.
North American purchase plans for used jets declined eight percentage points compared to a year ago, but that is back to historical levels, with last year at a five-year high.
Nearly 65% of demand for new jets is expected to come from North American operators over the next five years, up four percentage points from a year ago.
In Europe, operators have been slowly replacing aging aircraft in the fleet. Europe’s buying plans decreased to roughly 24% of the fleet, down four percentage points from a year ago; 24% of operators say they plan to make new purchases over the next two years.
In Latin America, 15% of the fleet is expected to be replaced or supplemented with new jet purchases over the next five years, down from 21% a year ago, with 19% of the purchases planned between 2020 and 2022.
Purchase plans in the Asia-Pacific region are largely unchanged from a year ago, with new jet acquisition plans for 14% of the fleet over the next five years. Thirty percent say they plan to schedule their purchases within the next two years, compared to 40% a year ago.
In the Middle East and Africa, 16% of respondents say they will replace or add to their fleet, up from 12% a year ago. About 26% of the operators say they plan to schedule their purchases within the next two years.
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