Honeywell Aerospace Forecasts $233 Billion in New Business Jet Sales Through 2017

As NBAA opens, biz remains bullish


ATLANTA , Sept. 23 /PRNewswire-FirstCall -- NBAA -- In its 16th annualBusiness Aviation Outlook issued today, Honeywell (NYSE: HON) forecasts delivery of approximately 14,000 new business aircraft from 2007 through 2017,generating industry sales of $233 billion.

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2007 marks the fourth year of industry expansion since the last trough in2003. Year-to-date, the number of aircraft delivered is up almost 11 percentcompared with the same point in 2006 and industry-wide sales are up just over12 percent, according to Honeywell Aerospace. For 2007, Honeywell Aerospaceforecasts deliveries of over 1,000 new business jets for the first time inhistory, up from 861 in 2006. Deliveries in 2008 are expected to exceed1,300.

Year to date new jet orders have risen over 100% over first half 2006levels. Available measures of total industry book to bill ratio have exceeded2.0 thus far in 2007. "Industry growth has moved into unparalleled territory,"said Rob Wilson , President, Business & General Aviation, Honeywell Aerospace."2007 is a record year for the industry," Wilson said, and "order intakeacross most business jet categories remains very strong, with littlediscernable effect from recent stock market fluctuations and with backlogsexceeding two and one half years worth of deliveries, 2008 will likely beanother banner year for the industry."

Global Purchase Expectations Increase

The 2007 survey indicates record aircraft deliveries will continue into2008. North American purchase expectations declined slightly, butexpectations in all other world regions expanded significantly. Overall,respondents to this year's survey said they expect to replace or expand theequivalent of about 33 percent of their fleets over the next five years, upfrom about 26 percent in the 2006 survey.

The increase in overall purchase expectations is supported by theincreasingly global nature of the industry. International buyers now accountfor about 50 percent of the new aircraft deliveries projected over the nextfive years. Purchase expectations trended up in Asia, Africa and the MiddleEast and rose strongly in Europe . Aggregating all regions, five-year purchaseexpectations were well above the 24 percent average recorded over the last sixyears. Between 2008 and 2012, the 2007 survey forecasts demand for 4,600aircraft globally, not including demand from Fractional ownership or brandedcharter start up businesses.

In North America , 2007 survey respondents said they expect to replace orexpand about 20 percent of their fleets during the next five years. "Thelevel of purchase expectations in North America remains significant," Wilsonsaid. "Despite slower economic growth and recent credit and stock marketfluctuations, survey purchase plans lost less than one percent of their 2006levels. Just like last year, we continue to hear concerns about high fuelcosts, taxes, user fees and ease-of-use issues such as Temporary FlightRestrictions in the United States ."

Despite those responses, overall buying plans in the region heldrelatively steady, with replacement plans actually increasing and offsettingsome of the slowdown in plans for fleet expansion. Honeywell's baselineforecast assumes lower than three percent U.S. GDP growth in the short term.Should the U.S. economy outperform those estimates purchase expectations couldstrengthen further.

In other regions, five-year purchase expectations gained strength. In Europe , purchase expectations of 47 percent were up significantly comparedwith 2006, and are well above the 25 percent-or-better levels that haveprevailed since 2001. "Seven consecutive years of strong purchase intentionsin Europe is a great track record, and confirms the value operators receivefrom using business jets," Wilson said.

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