Oct. 21--The depressed market for light and medium-sized business jets is expected to grow over the next decade, bringing some good news to Wichita in the long term, according to a new business jet forecast released Sunday by Honeywell Aerospace projects.
Demand will be spurred by new products and innovations, the company said.
"That's a really good sign for manufacturers of that size of aircraft," said Rob Wilson, president of Honeywell Business and General Aviation. "A large number of those manufacturers are in the Wichita area."
Manufacturers of light and medium-sized business jets have new program developments underway, said Charles Park, Honeywell director of market analysis.
"When those airplanes come into the market, we're very strong believers that that will stimulate demand," Park said.
Airplane owners want to purchase jets with improved range and bigger cabins, Wilson said. Operators from every region in the world said range was their top reason for buying a new small business jet.
Demand for light jets is expected to grow by 9 percent over the next 10 years, while demand for medium-sized jets is expected to grow 13 percent, Wilson said.
"That's a long time to wait, but it's certainly a good sign," Wilson said. Still, "I think it's still going to be a very slow growth environment in the next few years for the below super-midsized class."
Honeywell's forecast predicts planemakers will deliver up to 9,250 new business jets worth more than $250 billion during the 10 years from 2013 through 2022.
It expects deliveries to hit a low of 600 to 625 business jets this year, down slightly from a year ago. Deliveries are expected to improve in 2014 and start to grow.
Last year was expected to be the trough for deliveries, Wilson said. The decline this year is largely due to delays in new programs rather than a deterioration in demand, he said.
Increases after this year reflect "recovery in supply-side constraints and some gains linked to the projected pace of global economic recovery," Wilson said.
Honeywell released its 22nd annual Business Aviation Outlook forecast at a news conference Sunday at the Palms Casino Resort in Las Vegas that was attended by officials from Honeywell and the aviation industry and members of the media.
The forecast was released as the world's largest business jet show prepares to open. About 25,000 attendees and 1,100 exhibitors are expected to attend the show, sponsored by the National Business Aviation Association. It runs Tuesday through Thursday.
To prepare its forecast, Honeywell surveyed 12 to 15 percent of corporate fleet operators worldwide and asked about their purchase expectations. About 1,500 were interviewed about their plans to replace or add to their current fleets.
Over the next five years, operators said they plan to buy new jets equivalent to about 28 percent of their fleets, Honeywell said. More are expecting to buy in the next two or three years than those in last year's survey, Wilson said.
Nineteen percent of those purchases are expected to take place by 2014, with more than 22 percent scheduled to take place in 2015 and 2016. That leads to a modest gain in projected demand in the near future, the forecast said.
More buyers continue to focus on larger cabin aircraft classes, Honeywell said. The large cabin aircraft group over the next 10 years is expected to account for about 60 percent of the total units sold and about 85 percent of the retail value of the planes sold, the forecast said.
The forecast sees demand from North America increasing for the first time in recent history. And Honeywell thinks that over the next five years, 61 percent of the worldwide demand will come from the region.
That's welcome news, Wilson said, as North America has the largest fleet of airplanes of any region of the world.
On the flip side, some regions took a step backward.
Demand from developing markets, while posting higher growth rates than mature markets, continues to reflect cooling short-term economic conditions and, in some cases, regional turmoil.
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The model is signaling a rather robust recovery starting in 2012 with the next cyclic peak likely to be higher than in 2008, although fairly late in the forecast period.
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