Replacement demand for new aircraft contributes a significant share of new jet purchases in the fractional business that should support some improvement in new jet deliveries to the sector by 2011-2012. This sector’s higher utilization and its desire to maintain a consistent passenger experience with newer aircraft and hold down operating costs leads to replacement at shorter intervals than is typical for traditional operator groups.
Near-Term Demand Well-Distributed Across Aircraft Classes Based on new jet models mentioned by survey respondents, the 2009 Business Aviation Outlook projects a fairly balanced demand profile across most business jet segments over the next five years.
Medium and Medium-Large aircraft combined account for about 23 percent of the projected demand through 2014. Light and Light-Medium aircraft make up about 24 percent of projected five-year demand. The next largest groupings are in Long Range and Ultra-Long Range aircraft at 18 percent and in large class models also at 18 percent. Sustained interest in the Long and Ultra-Long Range segment is has been present for several years and reflects increased need for aircraft capable of trans-Pacific flights, as well as the growth in demand in other regions requiring more Long Range operations as trade and economic growth is still anticipated.
North America is expected to account for about 48 percent of business jet deliveries over the next five years, continuing to reflect somewhat more cautious attitudes and slower growth in the region versus the very high levels of purchase expectations in all other areas.
Honeywell has reported on this trend for several years, and the survey is tracking with observed shifts in orders and deliveries very closely. The North American share declined from 55 percent in the 2008 survey.
Asian demand through 2014 based on the survey slipped back to around 7 percent of the total on lower purchase plans aimed at fleet growth. European demand share expanded to 27 percent based on the record purchase plans in the region. Latin America share declined roughly one point to 11 percent. The Middle East/Africa region gained three points over last year to nearly 7 percent. While these percentages shift somewhat each year, the overall demand pool remains fairly large so individual regions are still absorbing significant numbers of new aircraft into their fleets, even if percentage share slips a few points. The record European purchase plans also put some pressure on other regions form a share standpoint, even though buying plans rose in those areas (notably Asia).
Demand Trends by Aircraft Segment
Honeywell’s 2009 Business Aviation Outlook provides the following estimates of demand trends by aircraft class:
Long Range and Ultra-Long Range: Deliveries of aircraft in these segments are projected to top 1,500 in the forecast period and deliveries should average around 120 to 140 per year over much of the forecast period. Aircraft in this category include the Bombardier Global Express and Global 5000, Challenger 850, Gulfstream G450, G500 and G550, Falcon 900EX, Falcon 900DX and the new Falcon F7X.
A Very High-Speed segment of Ultra-Long Range aircraft has also been launched with the development of the Gulfstream G650 and other potential entrants. This segment adds nearly 500 more aircraft to the demand for Ultra-Long Range aircraft through 2019.
Large: Honeywell Aerospace forecasts delivery of around 1,000 Large business jets over the forecast period. This sector’s outlook was affected by the cancellation of the Citation Columbus earlier in the year. Near-term, deliveries are expected to run around 60 to 75 aircraft until 2012 then trend higher from 2013 onward with new model introductions. Aircraft currently in this category include the Challenger 604/605, Gulfstream 350, Falcon 2000, Falcon 2000DX and EX, the future Super-Midsize Falcon and Embraer Legacy 600.
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