NBAA Convention News

Rolls-Royce sees a need for 51,000 engines by 2025

 - November 8, 2006, 6:49 AM

Continued vigorous growth in business jet deliveries, particularly among midsize and large jets, will generate $70 billion worth of revenue for the engine industry over the next 20 years, according to a new market forecast released by Rolls-Royce here at the show.

The company predicts that the business jet segment will need 51,000 engines over that time period to power 24,000 airplanes. The business community’s increasing recognition of the value of using business jets as productivity tools continues to fuel the growth, said Rolls-Royce.

Of the new business aircraft expected to enter the market, nearly half will come from the medium or large business jet category, according to the report. In fact, it added, only 130- to 190-seat airliners will surpass the medium and large business jet category in deliveries over the next two decades.

The forecast predicts that manufacturers will deliver nearly 12,000 midsize and large business jets through 2025, bringing the total to 16,500 aircraft. Rolls-Royce expects the industry to deliver 7,330 jets in the midsize category during the same period, a unit figure second only to the very light jet category, which it believes will account for some 7,650 deliveries.

“The market is recognizing the increasing value and utility of the new generation of medium and large business jets,” said Alan Stiley, Rolls-Royce vice president for marketing, corporate and regional aircraft. “While very light jets are getting a great deal of attention and will see large numbers of deliveries, it’s the larger aircraft that will have the delivered aircraft and engine value.”

That, of course, suits Rolls-Royce, whose AE 3007 turbofan powers the Cessna Citation X and Embraer Legacy 600 and whose Tay 611-8C powers Gulfstream’s large cabin, long-range G350 and G450 and whose BR710 powers the Bombardier Global Express and Gulfstream G550.

Rolls-Royce predicts that while the market for very light jets will require 21,000 engines of less than 3,000 pounds thrust over the next 20 years, the value of those deliveries will total only $14 billion. Meanwhile, the industry will require 13,000 engines worth $23 billion in the 6,000- to 10,000-pound-thrust range and 6,000 engines worth $20 billion in the 10,000- to 22,000-pound range, according to the company.

In general, the reasons for optimism seem clear: Rolls-Royce and many others in the business expect a continuing expanding world economy run by exponentially wealthier individuals. As such, corporations will continue to demand the luxury and utility business aviation offers. Next year alone it expects the industry to deliver close to 900 units–about 100 fewer than Honeywell projected in its market forcast released here on Monday, but still a record number.

Although corporate profits, stock market performance and GDP growth remain the best indicators of business jet market health, Rolls-Royce didn’t downplay the importance of new aircraft model introductions, airplane retirements and the development of the world outside North America and Europe. In fact, it expects the emerging very light jet segment to account for nearly a third of all deliveries. Still, the biggest earners–midsize and large jets–will draw most of the $344 billion in revenue the company predicts the airframe manufacturers will collect over the next two decades.