The business aviation industry will grow by 4-5 per cent over the next decade, according to a forecast from Honeywell.
The company’s 22nd Business Aviation Outlook predicts that up to 9,250 new business jets valued at over $250 billion will be delivered from 2013 to 2023.
Although these figures reflect slightly lower unit deliveries than in last year’s report, Honeywell is predicting a 3-4 per cent increase in delivery value compared with the company’s 2012 forecast due to pricing increases and more demand for expensive, large-cabin business jets.
Honeywell forecasts that the number of new business jets delivered throughout 2013 will be somewhere between 600 and 625, which is down on the 653 deliveries that Corporate Jet Investor predicted in May and down on the 672 business jets that were delivered in 2012. However, Honeywell attributes this to programme delays rather than falling demand.
Looking ahead to 2014, the company predicts a better picture for the industry. “2014 industry deliveries are anticipated to be up modestly, reflecting recovery in supply side constraints and some gains linked to the projected pace of global economic recovery,” says Rob Wilson, president of Honeywell Business and General Aviation.
Honeywell’s research finds that aircraft operators plan to replace around 28 per cent of their fleets with new business jets in the next five years, with 19 per cent of these purchases being closed by 2014.
Large cabin business jets are expected to account for 80 per cent of all new business jet expenditures in the near term and these jets will reflect nearly 60 per cent of additional units and nearly 85 per cent of additional retail value in the next decade.
The report also states that flight activity for fractional providers and charter operators “appears to be doing relatively well in the US.”
The report claims that North America will largely drive the market for the next 10 years, representing around 61 per cent of projected demand, which is up eight points from Honeywell’s 2012 report.
“Stronger new aircraft acquisition plans in North America are welcome news and should support industry momentum as some of the higher growth regions work through a year of modestly reduced growth rates,” says Wilson.
Latin America follows its Northern counterpart with an 18 per cent market share, while Europe, Asia Pacific and the Middle-East and Africa trail with 12 per cent, 5 per cent and 4 per cent respectively.
Aircraft buyers with acquisition plans in the BRIC countries appear to have lowered from 46 per cent to 42 per cent in the last year, but the portion of buyers intending to purchase aircraft in the next two years has increased from 40 per cent to 50 per cent.
The report states that “the emerging market results from BRIC countries reflect a slight tempering of enthusiasm compared to a year ago, but are still quite strong when compared with other regions, or with results accrued during the more than 20 years Honeywell has been conducting the survey.”