Honeywell, $270bn worth demand for business jets in 10 years

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, Honeywell Aerospace 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."

There are 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.

Moreover, 2016 deliveries are projected to be slightly lower reflecting weaker emerging market demand partially offset by deliveries to fractional operators and operators surveyed plan to make new jet purchases equivalent to about 22% of their fleets over the next five years as replacements or additions to their current fleet.

The total new business jet purchase plans, 19% are intended to occur by the end of 2016, while 17% and 20 % 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. Also, the longer-range forecast through 2025 projects a 3% average annual growth rate despite the relatively flat near-term outlook as new models and improved economic performance contribute to industry growth.

Source and image: Honeywell