LAS VEGAS, Nov. 15, 2015 /PRNewswire/ -- As a slow
growth economic environment takes hold across many global markets,
the business aviation industry is not immune to its impact. In its
24th annual Global Business Aviation Outlook released today,
Honeywell Aerospace (NYSE: HON) forecasts up to 9,200 new
business jet deliveries worth $270
billion from 2015 to 2025, with a 3 to 5 percent reduction
over the value noted in the 2014 forecast.
"While emerging markets like Brazil continue to be a bright spot for
business aviation over the medium term, we have seen weaker demand
across other key growth markets, which may affect near-term order
and delivery levels," said Brian
Sill, president, Business and General Aviation, Honeywell
Aerospace. "And while the sluggish economic growth and political
tensions are driving a more reserved approach to purchasing, we are
seeing operators invest in retrofits and upgrades for their
existing aircraft, especially around connectivity, boosting
aftermarket opportunities."
Key global findings in the 2015 Honeywell outlook include:
- Deliveries of approximately 675 to 725 new jets in 2015, a
single-digit percentage growth year over year. The improvement in
deliveries expected in 2015 is largely due to new model
introductions and an increase in fractional-usage type of aircraft
deliveries.
- 2016 deliveries are projected to be slightly lower reflecting
weaker emerging market demand partially offset by deliveries to
fractional operators.
- Operators surveyed plan to make new jet purchases equivalent to
about 22 percent of their fleets over the next five years as
replacements or additions to their current fleet.
- Of the total new business jet purchase plans, 19 percent are
intended to occur by the end of 2016, while 17 and 20 percent are
scheduled for 2017 and 2018, respectively.
- Operators continue to focus on larger-cabin aircraft classes,
ranging from super mid-size through ultra long-range and business
liner, which are expected to account for more than 80 percent of
all expenditures on new business jets in the near term.
- The longer-range forecast through 2025 projects a 3 percent
average annual growth rate despite the relatively flat near-term
outlook as new models and improved economic performance contribute
to industry growth.
Breakdown by
Region
Brazil, Russia, India, China
(BRIC) Slight improvements in Chinese and Russian purchase
plans compared with last year are not enough to support an improved
overall BRIC outlook.
- Since Honeywell first began spotlighting the BRIC countries in
2011, industry growth there has lost momentum, reaching just over
21 percent in this year's survey.
- Brazil remained a bright spot
by recording the strongest new aircraft purchase plans in the
survey, though overall buying plans fell year over year.
- The combined BRIC countries retain a very strong near-term
demand profile with 48 percent of intended new jet purchases
scheduled for the next two years.
Asia Pacific
Disappointing growth figures from several major regional
economies, ongoing regional tensions and government austerity
initiatives dampen operator enthusiasm.
- Operators in Asia Pacific
report new jet acquisition plans for 14 percent of their fleet, up
2 percent from 2014.
- Despite the below-average level, the improved purchase plans
yield about a 4 percent share of global demand over the next five
years for Asia Pacific.
- Nearly 40 percent of respondents are scheduling their new
purchases within the first two years of the five-year horizon.
Middle East and Africa Slightly lowered purchase plans
were reported, which is not surprising given another year of
significant political upheaval and ongoing conflict in the region
in tandem with low oil prices.
- The share of projected five-year global demand attributed to
the Middle East and Africa remained below its historical range of
4 to 7 percent again this year.
- In the Middle East and
Africa, 16 percent of respondents
said they will replace or add to their fleet with a new jet
purchase, down from 18 percent last year.
- Regional distress continues to weigh on operators, with
potential buyers in the region scheduling their purchases later in
the next five-year window compared with last year, with only 21
percent of purchases planned before 2018.
Latin America The
2015 results remain above the world average, and planned
acquisitions remain more front-loaded than the world
average.
- Twenty-nine percent of the Latin
America sample fleet expects to be replaced or added to with
new jet purchases, which is 1 point higher than last year's
survey.
- Nearly 48 percent of this region's projected purchases are
timed to happen between 2015 and 2017.
- Because of the current purchase plan levels, Latin America's 18 percent share of total
projected demand grew slightly compared with a year ago.
North America New
aircraft acquisition plans in North
America are very important given the region's size and the
unsettled conditions elsewhere around the world.
- An estimated 61 percent of projected demand comes from North
American operators, up 2 points from the 2014 survey.
- New jet purchase plan levels slipped less than 1 point in
North America, the industry's
largest market, and stand just under the world average of 22
percent.
- Current plan levels are somewhat below the averages of the
2008−2012 period. Though buying plan levels are moderate, the fleet
and operator base have expanded, supporting demand levels despite a
slightly smaller purchase plan rate.
Europe Operators are
still contending with sluggish growth and increased political
tensions, a refugee and migrant surge, and depreciated
currencies.
- Europe's purchase expectations
retreated this year to 24 percent.
- The European share of estimated global five-year demand also
receded compared with historical norms and is now at 14 percent in
the 2015 survey.
- A comparison of the planned timing for European purchases
indicates uneven proportions of demand in the next three years of
the five-year window, with about 17 percent allocated through 2016
followed by a dip to 10 percent in 2017 and a strong rebound to
over 26 percent in 2018.
Used Jets and Flight Activity
Turning to used jets and flight activity, over the course of the
past year the pace of flight activity recovery has weakened
somewhat. Ground lost by operators during the 2009 recession still
remains to be recaptured. With respect to the used jet market:
- Just under 10 percent of today's fleet is up for resale, down
from a high of nearly 16 percent in 2009. Current levels are normal
in light of the past decade's history; meanwhile, asking prices
continue to drift lower.
- In 2015, the total number of recent model jets (less than 10
years old) listed for resale has risen moderately to around 640
aircraft. However, in proportion to the decline in overall
listings, the share of recent model jets for sale has crept up more
noticeably.
- Operator respondents increased their used jet acquisition plans
by about 4 points, equating to 32 percent of their fleets in the
next five years. All regions' used jet purchase plans rose except
the Middle East and Africa, which was flat.
- Strong used aircraft purchase plans boost potential cockpit and
cabin upgrades.
Making an Impact on Business Decisions
This annual outlook reflects topical operator concerns but also
identifies longer-cycle trends that Honeywell uses in its own
product decision process. The survey has helped bring about
investments such as designing and developing flight efficiency
upgrades, optimized propulsion offerings, innovative safety
products, and enhanced aircraft connectivity offerings. It also
contributes to Honeywell's business pursuit strategy and helps
position Honeywell consistently on high-value platforms in growth
sectors.
Methodology
Honeywell's forecast methodology is based on multiple sources
including, but not limited to, macroeconomic analyses, original
equipment manufacturers' development plans shared with the company,
and expert deliberations from aerospace industry experts. Honeywell
also taps into information gathered from interviews conducted
during the forecasting cycle with over 1,500 nonfractional business
jet operators worldwide. The survey sample is representative of the
entire industry in terms of geography, operation and fleet
composition. This comprehensive approach provides Honeywell with
unique insights into operator sentiments, preferences and concerns,
and provides considerable insight into product development needs
and opportunities.
Supporting Resources
- Read more about Honeywell Aerospace on the Follow The Aero
blog
- Like Honeywell Aerospace on Facebook
- Follow @Honeywell_Aero on Twitter
- Subscribe to Honeywell's Corporate RSS feed
Honeywell Aerospace products and services are found on virtually
every commercial, defense and space aircraft, and its turbochargers
are used by nearly every automaker and truck manufacturer around
the world. The Aerospace business unit develops innovative
solutions for more fuel-efficient automobiles and airplanes, more
direct and on-time flights, safer flying and runway traffic, along
with aircraft engines, cockpit and cabin electronics, wireless
connectivity services, logistics, and more. The business delivers
safer, faster, and more efficient and comfortable
transportation-related experiences worldwide. For more information,
visit www.honeywell.com or follow us at @Honeywell_Aero and
@Honeywell_Turbo.
Honeywell (www.honeywell.com) is a Fortune 100 diversified
technology and manufacturing leader, serving customers worldwide
with aerospace products and services; control technologies for
buildings, homes and industry; turbochargers; and performance
materials. For more news and information on Honeywell, please visit
www.honeywellnow.com.
Honeywell and the Honeywell logo are the exclusive properties of
Honeywell, are registered with the U.S. Patent and Trademark
Office, and may be registered or pending registration in other
countries. All other Honeywell product names, technology names,
trademarks, service marks, and logos may be registered or pending
registration in the U.S. or in other countries. All other
trademarks or registered trademarks are the property of their
respective owners. Copyright 2015 Honeywell.
Logo - http://photos.prnewswire.com/prnh/20080425/LAF040LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/honeywells-business-aviation-forecast-sees-up-to-9200-deliveries-of-new-business-jets-valued-at-270-billion-through-2025-300178923.html
SOURCE Honeywell Aerospace