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Business Jet Sales Expected To Top USD300bn Through 2018

by Leroy Baker, Tax-News.com, New York

07 October 2008


In its 17th annual Business Aviation Outlook, Honeywell forecasts delivery of approximately 17,000 new business aircraft from 2008 through 2018, generating expected industry sales of USD300bn.

According to Honeywell, the aviation technology and manufacturing firm, 2008 marks the fifth consecutive year of industry expansion since the last industry slowdown in 2003. Year-to-date, the number of aircraft delivered is up almost 22% compared with the same point in 2007, and industry-wide new jet delivery revenues are also up just over 22%.

For 2008, Honeywell Aerospace forecasts deliveries of nearly 1,200 new business jets for the first time in history, up from 1,020 in 2007, a 15% increase, despite an uncertain economy in North America. Deliveries in 2009 are expected to range between 1,300 and 1,400 jets depending on how quickly several new programs are able to ramp up.

“New aircraft sales have remained at record levels” said Rob Wilson, President, Business and General Aviation, Honeywell Aerospace. “2008 will add to the string of record years the industry has experienced and order intake across most business jet categories remains strong, consistent with last year’s forecast. Aircraft backlogs currently equate to nearly three years' worth of deliveries, so 2008 and 2009 still shape up to be strong years for the industry.”

Year to date new jet orders have risen roughly 20-25% over first half 2007 levels, however a sizable portion of these orders are for new models entering service in 2012 and beyond. Honeywell believes that order intake will moderate to more sustainable levels in the second half of 2008 and into 2009. Nevertheless, available measures of total industry book-to-bill ratio are still running at or over two-to-one so far in 2008.

However, Honeywell cautions that recent data from the US Federal Aviation Administration (FAA) and European aviation authorities points to reduced business aircraft flight activity in the US and Europe for the rest of this year and potentially impacting 2009 flight operations as operators react to economic pressures and fuel price increases.

According to Honeywell, many flight department budgets for 2008 did not account for substantially higher fuel costs. Some report reduced flying activity or flights at slower cruise speeds to economize on fuel to remain within funded budget levels. The report also noted that for the first time in a number of years, US survey respondents indicated they intend to use their aircraft less in the near term. However, utilization plans reported in the rest of the world are generally more favorable.


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