As the National Business Aviation Association’s 2018 Business Aviation Convention & Exhibition (NBAA-BACE) kicks off Oct. 16 in Orlando, Florida, Honeywell released its 27th annual business jet aviation forecast, which forecasts up to 7,700 new business jet deliveries worth $251 billion from 2019 to 2028.
That’s up about 2% from the 2017 10-year forecast, according to Honeywell officials.
“A better used-aircraft market environment coupled with the entry into service of many new business jet platforms will lead to higher deliveries in 2019 after a virtually flat year in 2018,” said Bill Kircos, vice president, Global Marketing, Honeywell Aerospace. “We are excited about the used market and about new and innovative aircraft models that will not only drive solid growth in 2019 and 2020, but also have a significant impact on new business jet purchases in the midterm and long term.”
Key findings in the 2018 Honeywell global outlook include:
- Operators plan to make new jet purchases equivalent to about 20% of their fleets over the next five years as replacements or additions to their current fleet, an increase of 1% compared with the 2017 survey results.
- Of the total purchase plans for new business jets, 14% are expected to occur by the end of 2019, while 16% are scheduled for 2020 and and 24% for 2021.
- Operators continue to focus on larger-cabin aircraft classes, ranging from the Super Mid-size through Ultra-Long range, which are expected to account for more than 87% of all expenditures of new business jets in the next five years.
- The longer-range forecast through 2028 projects a 3 to 4% average annual growth rate as new models, improved economic performance, and anticipated favorable exchange rates for international customers will contribute to industry growth.
- Purchase plans are higher in North America this year than last, and increased significantly in Europe, with slow economic growth and geopolitics affecting plans in Latin America, Middle East and Asia Pacific.
Used Jets and Flight Activity
The pace of flight activity in the past year has increased, with survey respondents in all regions of the world except Asia reporting higher utilization in 2018 compared with 2017.
With respect to the used jet market:
- Average asking prices have increased slightly in August compared with previous years with light jets higher, medium jets stable and heavy jets lower. There has been a 13% improvement year over year in overall used aircraft inventory levels.
- The total number of recent model jets (less than 10 years old) listed for resale is down 30% year over year and is now just slightly higher than 5% of the installed base. This is well below historical average of about 8% and very positive for new business jet sales.
- A decline in young used aircraft inventories has been led by North America with only 4% of the installed base for sale. Asia has the highest 0- to 10-year used aircraft for sale at slightly more than 7% of installed base for sale.
- In proportion to the level of overall listings, however, the share of recent model jets for sale is still more than 20% of total listings in comparison with pre-recession levels of 15 to 20%.
- Survey respondents decreased their used jet acquisition plans by about 1%, equating to 24% of their fleets in the next five years. All regions’ used jet purchase plans were higher or stable, but slightly lower in North America.