Honeywell released its latest annual Global Business Aviation Outlook Tuesday (6 October) and said it sees 7,300 new business jet deliveries worth US$235 billion from 2021 to 2030, down 4 percent in deliveries from the same 10-year forecast a year ago. Despite the dip, four of five business jet operators in the survey indicate that purchase plans have not been affected by the COVID-19 pandemic. Short-term reductions in both deliveries and expenditures due to the pandemic aren’t expected to have a lasting impact on the business jet industry.
“Business jet usage is expected to rebound to 80 percent to 85 percent of 2019 levels in the fourth quarter of 2020 and fully rebound by the middle of 2021, indicating demand for business jet travel is returning after the global pandemic caused a slowdown in the industry earlier this year,” said Heath Patrick, president, Americas Aftermarket, at Honeywell Aerospace. “The information we gleaned from operators shows a less than 1 percent decline in five-year purchase plans, so despite the short-term effects of the pandemic, we don’t expect long-term changes to purchase plans or to the overall health of the business jet market.”
The survey also found:
- Five-year purchase plans for new business jets are down less than one percentage point compared with last year’s survey.
- Among those purchase plans of new business jets over the next five years, 30 percent are expected to occur in the next two years. This is five percentage points lower than last year’s survey, due mainly to near-term uncertainty.
- Business jet deliveries in 2021 are expected to be up 13 percent from a COVID-impacted 2020.
- Operators plan to make new jet purchases equivalent to about 16 percent of their fleets over the next five years as replacements or additions to their current fleet, in line with 2019 survey results.
- Operators continue to focus on larger-cabin aircraft classes, from large cabin through ultralong- range aircraft, which are expected to account for more than 70 percent of all expenditures of new business jets in the next five years.
- The longer-range forecast through 2030 projects a 4-5 percent average annual growth rate of deliveries in line with expected worldwide economic recovery. This figure is higher than in 2019 due in part to COVID-related declines in 2020.
- Purchase plans for used jets show a moderate decline in this year’s survey. Operators worldwide indicated that 25 percent of their fleet is expected to be replaced or expanded by used jets over the next five years, down six percentage points compared with survey results from 2019.
Honeywell said four out of five operators in the survey said their buying plans have not been affected by COVID-19. Most of the operators who indicated their buying plans have been affected say they now plan to hold onto their current aircraft longer. The company also said 82 percent of respondents in North America expect to operate their business jets less frequently in 2020 versus 2019. Other regions are seeing similar declines. Global business jet usage is expected to recover to 2019 levels by the second half of 2021.
Survey respondents did not signal sales of late-model aircraft due to COVID-19. Specifically, only 10 percent of all respondents in the survey are planning to sell one or more aircraft without replacement in the next five years compared with 8 percent in last year’s survey. Survey responses do not support the hypothesis that a decline in commercial travel has led to an increase in purchases of business jets. More than 95 percent of operators expect no change to fleet size due to a decrease in commercial travel.
Breakdown by Region
North America – Compared with last year, new aircraft acquisition plans in North America are flat. New jet purchase plans remain unchanged in North America in this year’s survey. Over the next five years, 15 percent of the fleet is expected to be replaced or supplemented with a new jet purchase. About 32 percent of operators responding to the survey plan to schedule their new purchases within the first two years of the five-year horizon. This is four percentage points lower than in last year’s survey. Purchase plans for used jets are lower, down eight percentage points when compared with last year’s survey but back to historical levels as last year saw a five-year high. An estimated 64 percent of worldwide demand for new jets will come from North American operators over the next five years, up four percentage points compared with last year’s survey.
Europe – Operators have slowly been replacing aging aircraft in the fleet. Europe’s purchase expectations decreased this year to roughly 24 percent of the fleet, down 4 percentage points compared with last year’s results. About 24 percent of operators plan to schedule their new purchases within the next two years, down six percentage points and below the worldwide average of 30 percent. Europe’s share of global demand over the next five years is estimated to be 18 percent, one percentage point lower than last year.
Latin America – Purchase plans dipped six percentage points to a five-year low. In Latin America, 15 percent of the fleet is expected to be replaced or supplemented with new jet purchases over the next five years, down from 21 percent in last year’s survey. About 19 percent of this region’s projected purchases are planned between 2020 and 2022, lower than the worldwide average of 30 percent. Latin America will represent about 3 percent of the total projected business jet demand over the next five years versus 7 percent in last year’s survey. The decline is due to economic pessimism in the region.
Asia-Pacific – Purchase plans are stable in the region, largely unchanged from last year. Operators in Asia-Pacific report new jet acquisition plans for 14 percent of their fleet over the next five years. Based on the expressed level of purchase plans, Asia-Pacific remains at a 10 percent share of global new jet demand over the next five years. About 30 percent of respondents in Asia-Pacific plan to schedule their new purchases within the first two years of the five-year horizon, compared with 40 percent a year ago.
Middle East and Africa – Higher purchase plans were reported, following a five-year low in 2019. The survey found 16 percent of respondents said they will replace or add to their fleet with a new jet purchase, up from 12 percent last year. Respondents plan to schedule more new business jet purchases within the first year of the survey compared with 2019. About 26 percent of operators in this year’s survey plan to purchase new business jets within the next year, up from 20 percent in last year’s survey. The share of projected five-year global demand attributed to the Middle East and Africa is 4 percent, in line with the historical range of 4-6 percent.