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Honeywell Forecasts Modest Growth Into the Next Decade
October 29, 2012
Expect three years of modest growth followed by slightly higher gains extending into the next decade. That’s the forecast coming from Honeywell Aerospace, which released its 21st Annual Business Aviation Forecast on Oct. 28, just prior to the start of NBAA's 65th Annual Meeting & Convention (NBAA2012).
The forecast also predicts that nearly 10,000 new business jets, valued at about $250 billion, will be delivered between 2012 and 2022.
Honeywell officially labeled 2011 as the trough of the downturn, which began in 2009, and predicts a 9 percent gain in deliveries in 2012 over last year.
“We’re slowly emerging from one of the worst downturns in the history of our industry,” said Rob Wilson, president of Honeywell’s business and general aviation operations, adding that despite uncertainty about the economy, purchase expectations at many of the 1,500 corporate flight departments surveyed around the world remain unchanged.
Additional key findings from the report:
- Thirty percent of buyers plan to replace or repurchase a new aircraft in the next five years.
- Brazil, Russia, India and China – the so-called “BRIC” countries – lead all world regions in purchase plans.
- Large cabin jets account for more than 40 percent of new purchase plans.
- International markets will account for 47 percent of worldwide demand for business aircraft.
The forecast found that purchase expectations for the next five years are slightly higher than the 25-percent level that was “the norm until 2006,” although they are well below the peak of 40 percent found in the 2009 survey. Honeywell said roughly 20 percent of those planning a purchase intend to do so by 2013, with similar proportions planning business jet purchases the next two years.
In fact, Wilson said purchase expectations in 2012 have held steady with the last two years. “In light of all the world uncertainty, we see this global demand as a very good sign,” he said.
Regionally, sluggish economic growth in the U.S. and recession in Western Europe have impeded flight activity growth. However, Wilson said flight activity continues to increase in emerging regions. Overall, international flight growth remains above domestic levels, Honeywell said in the forecast.
The session included a roundtable discussion moderated by Jim Avila, ABC News senior national correspondent. Panelists included Wilson, Pete Bunce, General Aviation Manufacturers Association president and CEO, and Ed Bolen, NBAA president and CEO.
The discussion touched on a variety of subjects, including the fact that business aviation tends to more rapidly embrace new technology and innovation than commercial airlines.
“Looking at the commercial airlines, 90 percent of their traffic goes to something like 70 or 80 airports,” Bolen said when asked to explain the trend. “Business aviation goes to 5,000 airports just in the United States.”
Because business aviation pilots often are landing in unfamiliar airports and challenging conditions, “there is a tremendous desire to always have strong situational awareness,” he said.
When looking at the state of business aviation today, Bolen observed that the industry tends to follow the economy’s lead. “When the economy is expanding, our industry expands,” he said. “When the economy retracts, our industry retracts.”
Bolen also said that given the uncertainties of the economy and the coming presidential election, many people are sitting on the sidelines. “Our hope is that as we begin to see a positive turn in the United States... we expect that some people will start to come off the fence,” Bolen said.