Honeywell forecasts 7,600 new business jet deliveries over next decade valued at $248 billion

Five-year purchase plans for new business jets down slightly, but plans to buy used jets grow significantly.

Last week, General Dynamics announced that the Gulfstream G500 received certification from the European Aviation Safety Agency, clearing the way for European Union registrations and customer deliveries. Honeywell forecasts growth in the business jet market, which the G500 competes in.
Last week, General Dynamics announced that the Gulfstream G500 received certification from the European Aviation Safety Agency, clearing the way for European Union registrations and customer deliveries. Honeywell forecasts growth in the business jet market, which the G500 competes in.
General Dynamics

LAS VEGAS - The business jet industry is expected to see strong growth in the short to medium term, supported by several new airplane models coming to the market, according to Honeywell's 28th annual Global Business Aviation Outlook. The Global Business Aviation Outlook forecasts up to 7,600 new business jet deliveries worth $248 billion from 2020 to 2029, down 1 to 2 percentage points from the 2018 10-year forecast.

"Production ramp up on many new business jet platforms are expected to lead to a 7% increase in deliveries in 2020, following a strong projected growth in 2019 over 2018 aircraft deliveries," said Heath Patrick, president, Americas Aftermarket, Honeywell Aerospace. "We are confident that these new and innovative aircraft models will support solid growth in the short term and have a continuing impact on new business jet purchases in the midterm and long term."

Key findings in the 2019 Honeywell global outlook include:

  • Operators plan to make new jet purchases equivalent to about 17% of their fleets over the next five years as replacements or additions to their current fleet, a decrease of 3 percentage points compared with 2018 survey results.
  • Of the total purchase plans for new business jets over the next 5 years, 35% are expected to occur in the first two years of the survey, with 57% of purchase plans realized by year three. This is 5 percentage points higher than last year's survey.
  • Operators continue to focus on larger-cabin aircraft classes, from large cabin through ultralong-range aircraft, which are expected to account for more than 71% of all expenditures of new business jets in the next five years.
  • The longer-range forecast through 2029 projects a 2% to 3% average annual growth rate in line with expected worldwide economic growth and supported by the current and expected introduction of new models throughout the forecast period.
  • Purchase plans for used jets are significantly higher in this year's survey. Operators worldwide indicated that 32% of their fleet is expected to be replaced or expanded by used jets over the next five years, up 8 percentage points compared with survey results from 2018.
  • The main factors that influence purchasing decisions are aircraft performance, followed by brand experience, cabin and range. Survey participants also cited direct operating costs and customer support experience as elements that will influence their decision on which aircraft to buy.

Breakdown by Region

North America – Compared with last year, new aircraft acquisition plans in North America are slightly lower.

New jet purchase plans decreased 2 percentage points in North America in this year's survey. 15% of the fleet is expected to be replaced or supplemented with a new jet purchase over the next five years.

About 36% of operators responding to the survey plan to schedule their new purchases within the first two years of the five-year horizon. This is stable compared with last year's survey, and in line with the worldwide average of 35%.

Purchase plans for used jets are significantly higher, up 11 percentage points when compared with last year's survey. A full one-third of the fleet is expected to be replaced or supplemented with a used jet over the next five years. That is the highest percentage measured in the past five years of the survey.

An estimated 60% of projected worldwide demand for new jets will come from North American operators over the next five years.

Europe – Operators are facing a slow economic growth environment and the uncertain effects of Brexit, and new jet purchase plans decreased in this year's survey.

Europe's purchase expectations decreased this year to roughly 28%, a decrease of 5 percentage points compared with last year's results. This result is in line with the previous five-year average of 27% measured in the region.

Planned timing for European purchases in the first two years of the survey are at 34%, just 1 point below the worldwide average of 35%.

Based on this year's survey results, Europe's share of global demand over the next five years is estimated to be 19%.

Latin America – Purchase plans are stable in the region and are lower by only 1 percentage point when compared with last year's results.

21% of the sample fleet in Latin America is expected to be replaced or supplemented with new jet purchases over the next five years. Purchase plans are stable in Mexico, but slightly lower from operators in Brazil in this year's results compared with last year.

About 29% of this region's projected purchases are planned between 2019 and 2021, lower than the worldwide average of 35%.

It is estimated that Latin America will represent 7% of the total projected business jet demand over the next five years.

Asia Pacific – Despite geopolitical and commercial tensions, purchase plans are higher in the region, up by 3 percentage points from last year.

Operators in Asia Pacific report new jet acquisition plans for 15% of their fleet over the next five years.

Based on the expressed level of purchase plans, Asia Pacific would represent a 10% share of global new jet demand over the next five years.

About 40% of respondents in Asia Pacific plan to schedule their new purchases within the first two years of the five-year horizon, the highest proportion of all the regions.

Middle East and Africa – Lower purchase plans were reported, impacted by political tensions and ongoing conflicts in the region.

12% of respondents said they will replace or add to their fleet with a new jet purchase, down from 14% last year.

About 32% of operators responding to the survey plan to schedule their new purchase within the first two years of the five-year horizon.

The share of projected five-year global demand attributed to the Middle East and Africa is 4%, in line with the historical range of 4% to 6%.

Flight Activity and Used Jet Market Dynamics

The pace of flight activity in the past year has remained stable, with survey respondents in all regions except Europe reporting stable utilization in 2019 compared with 2018. In Europe, operators indicated a lower utilization this year when compared with 2018.

With respect to the used jet market:

  • Survey respondents increased their used jet acquisition plans by about 8 percentage points, equating to 32% of their fleets in the next five years. These are the highest purchase plans measured in the past five years of the survey.
  • Used jet purchase plans in all regions were higher, except for Europe.
  • The significant increase in purchase plans for used jets in this year's survey could indicate an anticipation from respondents that with the expected increase in new aircraft deliveries in the short term, a greater number of young used aircraft will be available for sale at very good prices.
  • Survey results show a higher than average transfer of demand from the new to the used market from operators that typically purchase new jets. Fifteen percent of respondents indicated they would transfer from the new to the used market in the 2019 survey. This is 3 percentage points higher than the survey average from the past five years.
  • Survey results also indicate that close to 30% of purchase plans for used jets are for aircraft less than five years old, or for aircraft models that have yet to start delivering.
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