Business jet deliveries are expected to hit bottom next year before beginning a slow — but steady — climb upward, according to Honeywell Aerospace's annual business aircraft outlook released Sunday evening.
Planemakers expect to deliver between 750 and 800 business jets this year, down from 1,139 jets a year ago, the outlook said.
Next year, deliveries are projected to drop farther — to about 650 jets, followed by a flat to moderate improvement in 2011, the outlook said.
Things look better starting in 2012 from pent-up demand and an expected global economic recovery.
The business aviation market is key to Wichita, where Cessna Aircraft, Hawker Beechcraft and Bombardier Learjet produce 45 percent of the world's business jets.
The three planemakers have laid off more than 13,000 people in the last 12 months after cutting production as customers canceled and deferred orders during the economic downturn.
Long-term, "there is a strong demand out there," said Rob Wilson, Honeywell Aerospace president of business and general aviation. "People still value business aviation and the efficiency and security."
In the meantime, "we'll have to buckle down for a slow but steady recovery," he said.
Honeywell released its 18th annual forecast at a briefing Sunday in Orlando, Fla., ahead of the National Business Aviation Association's annual convention. The show opens Tuesday and runs through Thursday.
Honeywell's forecast was compiled from interviews it conducted in the second half of 2009 with roughly 1,200 corporate flight departments worldwide and from economic data and projections.
Honeywell's outlook projects deliveries of up to 11,000 new business jets, valued at $200 billion, in the 11 years from 2009 through 2019.
The forecast is down significantly from a year ago, when predictions called for 17,000 jet deliveries over an 11-year period.
The economic downturn was more severe than experts predicted as the credit crisis spread around the world, damaging key international markets for jetmakers.
2008 marked the end of an unprecedented five-year industry expansion that began in 2003.
In 2009, for the first time in several years, the number of new orders has fallen below the number of planes delivered. Orders had been running twice the rate of deliveries.
It will take time for shipments to return to previous records, Wilson said.
"We're not going to see 2008 output levels as an industry until roughly 2017," he said.
There are reasons for optimism, however.
Business jet operators surveyed by Honeywell say they plan to buy aircraft equivalent to about 40 percent of their fleet, a higher-than-expected number, Wilson said.
Most of them said they planned to buy later in the five-year period, rather than earlier.
Even so, Wilson said he was surprised at how strong the purchase plans were.
The number is a "very, very strong indication of the value... the user community puts on business aviation and continuing to add and replenish and replace their fleets," Wilson said.
The fall in deliveries must also be put in perspective, he said. Even though they are down significantly, the bottom of the cycle will still be at levels consistent with the 2004 and 2005 time frame.
It's "still a healthy industry," he said.
During the downturn, planemakers canceled and delayed some new aircraft programs. But a solid pipeline of new models in the next few years will help support long-term growth of the industry as the economy improves, Wilson said.
Demand also is expected to be stronger internationally than domestically, the survey found, with the largest demand coming from Europe, Russia, the Middle East and Africa, and Asia and the Pacific.
From now until 2019, the forecast predicts demand for 1,500 long-range and ultra-long range jets; 1,000 large business jets; 2,400 medium and medium-large jets; 2,400 light and light-medium jets, and 2,800 very light jets.