Honeywell: new bizav growth in Old World regions
One trend identified in Honeywell’s latest Business Aviation Outlook is the increasing importance of international sales. The 2009 operator survey indicates that over the next five years up to 34 percent of all new jet purchases in the world could come from Europe, the Middle East and Africa. These findings reflect a significant increase over prior survey results.
In Europe, 59 percent of respondents indicated plans to buy new jets within the next five years, an increase of more than 19 points compared with surveys conducted before the economic downturn. It is a new record high despite the sluggish economic conditions that prevailed at the time of the survey.
In the Middle East and Africa, 55 percent of respondents reported plans to buy new jets during the same time frame.
Europe has joined the Middle East, Asia and Africa regions with the world’s highest purchase expectations, moving international demand up to approximately 50 percent of the new aircraft purchase plans projected over the next five years.
“Emerging markets such as Eastern Europe, the Middle East and Asia are expected to lead the global recovery after 2010,” said Rob Wilson, Honeywell Aerospace president for business and general aviation.
The forecast predicts deliveries of approximately 700 new business jets this year, down from a peak of 1,139 in 2008. However, based on operator survey responses, long-term buyer interest has increased. New purchase plans are currently timed later in the five- year planning window, suggesting that by 2011-2012 significant deferred demand will improve the outlook for order intake and new jet deliveries.
Among operators worldwide, those in Europe signaled the earliest plans to resume significant new jet purchase activity, followed by Asia and the Middle East. The North American region remained the most conservative and exhibited considerable uncertainty about the specific timing of planned new jet purchases.
Honeywell found that most of the increase in Europe, the Middle East, Africa and Asia purchase plans came from the fleet-replacement category. Conversely, fleet-expansion demand fell in all regions except Asia, which was up less than 1 percent compared with last year.
Recognizing the historical relationships among global economies, new model value and the business jet segment, the survey suggests that demand for business jets will begin to recover 12 to 18 months after a global economic recovery begins.
“Recent economic performance around the world would suggest that recovery is under way despite some trouble spots. This expectation is also consistent with the 2009 survey based on demand timing,” the report states.
Overall, Honeywell believes that the longer-term outlook for business aviation is still positive but predicts delivery rates will remain soft this year and the peak-to-trough decline will be in the range of 40 to 45 percent compared with 2008 deliveries.
By 2012, a combination of deferred demand and global economic recovery will cause demand for new jets to improve. The pipeline of new high-value models also supports the prediction for long-term growth, and international demand will remain significant.