Honeywell Bizjet Forecast Is Upbeat,
Despite Some Near-Term Doldrums

Deliveries of 7,600 business jets, valued at a total of $121 billion, will be effected over the decade 2003-2013 according to predictions contained in Honeywell Aerospace's 11th annual Business Aviation Outlook, released at the opening of the convention. Despite slow recovery over the next 12 to 18 months, the overall movement will be toward 2003 to 2007's turning out marginally better figures than the previous five years, with fractional ownership and new aircraft models responsible for most of the improvement.

Not unexpectedly, 2002 and 2003 figures will both show a decline after the peak year of 2001. Thereafter, they will steadily climb to 900 deliveries per year, but converters of transport aircraft reconfigured as business jets will not be able to build on earlier successes and will have to be satisfied with about 150 per year.

Manufacturer backlogs now stand at the historically high figure of 1,800. Orders have slowed recently, yet few have been canceled and several manufacturers have enjoyed fairly strong order levels in the initial half of this year. There were 352 turbofan aircraft delivered in the first half-13% down from the record year of 2001.

Honeywell estimates 700 new bizjets in the under-100,000-pound GTOW range will be delivered this year, against 769 in 2001 and an estimated 650 in 2003. This differs slightly from some other surveys, which anticipate the pickup starting in 2003.

"Solid backlog levels, introduction of new jet models and continued growth shown by new demand channels such as fractional ownership, virtual airlines and other innovative approaches to business aviation are key factors in the continued expansion of this business," said Honeywell Aerospace president and CEO Bob Johnson.

Based on responses from 1,000 flight departments in North America, Latin America, Europe and Asia, the survey predicts a modest 3% upswing in business jet deliveries over the next five years. The greater proportion of this will come from Asia, where intentions to purchase are the highest recorded by Honeywell in any region since the survey began a decade ago.

Noticeably, interest in new models accounted for almost 44% of five-year demand for new jets over the coming half-decade.

Fractional ownership and secondary time-shares (virtual airlines) will continue their growth, says Honeywell, with charter operators sharing in some of the benefits flowing from increased fractional use and the difficulties of commercial air transport in the past year. Fractionals account for 7% of the global business fleet, serving nearly 4,000 shareholders, but they are generating 45% of the current order backlog and by 2012 will constitute 10 to 12% of the world fleet.

Over the five-year term, the North American market will take 71% of new jets delivered (down 3% from last year's estimates), with operators predicting they will replace or expand 22% of their jet fleet. Aircraft age (a "sell-by age" of just over 10 years is the average) and inadequate range are the two leading factors prompting replacement, with cabin space, speed and enhanced avionics featuring as secondary reasons.

Western Europe's plans for new jets remain steady at a 14% world share, consistent with last year. The dollar's comparative weakness against the euro and optimism for increased business in Eastern Europe have sustained demand. As in North America, age is a determining factor in replacement plans, but the Europeans are more concerned with cabin size than range. They will replace 30% of their fleet, compared with 22% in the last five years.

In contrast, Latin America is looking for an 18% change, expectations depressed by high fuel costs, economic conditions, new requirements, and user fees. Global share will be 6%, due almost entirely to age-related disposals, but with speed and RVSM introduction also mentioned as contributing to replacement.

Asia's market will grow from 7% to 8% annually, says Honeywell. Operators are encouraged by the return of more stable economic conditions and expect to take 9% to 10% of world business jet output.
Overall, the 10-year forecast is for 1,150 long-range, 800 large, 2,300 medium/large, 2,100 light/medium, and 1,300 very light jet deliveries, not including such ultra-light aircraft as the Eclipse. This positive view is endorsed by Bob Johnson's assertion that "the past year has shown the true depth of business aviation's strength and durability."

By Paul Jackson