Bombardier Business Aircraft has lowered its 10-year forecast for business jet deliveries, with the sharpest declines coming in the light and medium jet categories — segments that are critically important to Wichita.
Bombardier, the Canadian parent of Learjet in Wichita, released its 2016 Market Forecast this week at the European Business Aviation Convention and Exposition in Geneva, Switzerland, which ends Thursday.
Its forecast calls for up to 8,300 new business jet deliveries between 2016 and 2025, which is 700 jets lower than its 2015 forecast of 9,000 new business jet deliveries between 2015 and 2024.
In terms of dollar value, that’s a $17 billion difference between last year’s forecast and this year’s.
Bombardier attributed the lower deliveries in its updated forecast to global economic trends, including lower worldwide gross domestic product, low oil prices and lower stock market returns.
Of the three segments of the business jet market — light, medium and large — Bombardier expects the latter to see the smallest decline in deliveries by the end of 2025: 2,400 large jet deliveries with a value of $130 billion.
That’s 4 percent fewer deliveries compared with its 10-year forecast last year, which projected 2,500 large jet deliveries valued at $137 billion.
“Significant growth is expected long term, with larger aircraft continuing to dominate the market,” Bombardier said in the forecast, predicting that economic growth will rebound later in the period in emerging markets such as China, stimulating sales of large-cabin, long-range business jets.
But for smaller jets, the delivery declines are steeper. In its updated forecast, Bombardier expects 2,800 medium jets valued at $84 billion to be delivered between 2016 and 2025.
In its 2015 forecast, Bombardier said 3,100 medium jets valued at $91 billion would be delivered in 10 years. That’s a 9.7 percent decline in medium jet deliveries.
The decline is almost as great for light jets, which would include its Wichita-built Learjet 70s and 75s, according to its 2016 forecast. Bombardier expects 3,100 light jets valued at $36 billion to be delivered in the next decade. That’s 8.8 percent less than the 3,400 light jets — valued at $39 billion — it projected would be delivered in 10 years in its 2015 forecast.
The light jet category is important not only to Bombardier’s Learjet operations, but also to Textron Aviation’s Cessna Citation jet line, which spans the light and medium segments.
But aviation forecaster Rolland Vincent, managing director of JetNet iQ, said his firm is projecting the opposite for light and medium jet deliveries in the next decade.
Vincent said he sees the light and medium business jet categories as “quite stable and maybe a little bit up” in terms of deliveries over the next decade.
“It’s certainly not lower than it was,” he said Wednesday morning from EBACE.
What’s more, he thinks large business jets are the only segment that will see a delivery decline between now and 2025. That’s a function of projected delays in new, large business jets coming to the market — including Bombardier’s new Global 7000 jet, its largest business jet to date — and large-cabin jet pricing, which has “really, really dropped” and is evidence of a softening market for them.
Large jets are “now going through the (down) cycle that the other segments did,” Vincent said.
“I would say steady as she goes on the Wichita impact.”