Honeywell lowers worldwide business jet forecast

An economic slowdown in parts of the world will likely dampen the pace of business jet deliveries in the next decade.

That’s according to Honeywell Aerospace’s 2015 Global Business Aviation Outlook, released Sunday afternoon in Las Vegas in advance of the National Business Aviation Association Convention & Exhibition.

The show opens Tuesday and runs through Thursday. It will be preceded Monday by a media day.

Honeywell’s forecast, in its 24th year, predicts 9,200 new business jet deliveries valued at $270 billion between 2015 and 2025.

That’s down by 250 jets and $10 billion from Honeywell’s 2014 forecast, which projected deliveries of 9,450 new business jets valued at $280 billion over 10 years.

The lowered forecast comes largely from weaker demand in growth countries such as China and India and in other overseas regions such as Asia Pacific, Africa and Europe.

But Latin America and North America – the latter of which is a key market for Wichita’s business jet makers – should blunt the effects of economic slowdowns, political unrest and government austerity measures elsewhere, Honeywell officials said in an interview with The Eagle.

The forecast is developed from sources such as aircraft manufacturers, macroeconomic analyses and interviews with more than 1,500 business jet operators with 3,600 aircraft.

In the near term, the forecast predicts between 675 and 725 new jet deliveries in 2015. The top end of that range would be slightly higher than in 2014, when manufacturers delivered 722 business jets, according to the General Aviation Manufacturers Association.

Business jet deliveries in 2016 should be flat to slightly lower, although the forecast did not provide exact figures.

“We expect roughly similar delivery levels in 2015-2016 as the industry transitions to new models amid a shifting international economic outlook,” said Brian Sill, Honeywell Aerospace’s president of business and general aviation.

Over the next decade, the forecast said, global, regional demand for new business jets will be led by North America at 61 percent, followed by Latin America at 18 percent and Europe at 14 percent. Asia Pacific and the Middle East and Africa each account for about 3 percent.

Compared with the 2014 forecast, the 2015 Honeywell forecast has global, regional demand increasing 2 percent in North America and 1 percent in Latin America. Demand in Europe, however, is down 4 percent, while it’s flat in Asia Pacific and the Middle East and Africa.

Consistent with previous forecasts, the majority of the world’s new business jet purchases will be for super-midsized through business liner jets, Sill said.

Fifty-two percent of new business jet purchases will be for the biggest class of jets, followed by 23 percent for midsized jets and 25 percent for light jets.

Charles Park, director of market analysis for Honeywell Aerospace, said buyers of new business jets incrementally want a little more from their next new jet purchase, such as range and cabin comfort.

“They want an aircraft that’s more flexible,” Park said.

“And more city pairs,” added Sill, meaning the ability to connect from one city to the next without having to refuel.

“Large cabin, with … club seating, full lavatory, stand-up cabin with flat floor,” Sill said. “Those are all things people are looking for.”

The only region in the world where the forecast says demand is nearly evenly split between large, midsize and small jets is North America.

In North America, Sill said, “the model demand is more balanced than what we’ve seen in the other regions … from small to ultra-long range.”

That’s particularly good for Textron Aviation and Bombardier Learjet, whose current jet offerings span the small to super-midsize range of aircraft. North America also is historically the strongest market for small to midsize business jets.

“New aircraft acquisition plans in North America are very important given the region’s size and the unsettled conditions elsewhere around the world,” the forecast said.

This story was originally published November 15, 2015 at 9:32 PM with the headline "Honeywell lowers worldwide business jet forecast."