Industry Forecast Predicts Slight Increase in 10-Year Business Jet Deliveries

Oct. 15, 2018

A welcome upswing in the European market should help drive slightly higher deliveries for business jets over the next 10 years, according to Honeywell’s 27th annual Global Business Aviation Outlook, which forecasts up to 7,700 new business jet deliveries worth $251 billion from 2019 to 2028, up 1-2 percentage points over last year’s reporting period. Released ahead of NBAA’s Business Aviation Convention & Exhibition (NBAA-BACE), the forecast predicts that general improvement to the global economy and anticipated favorable exchange rates for international customers will contribute to a 3-4 percent average annual growth rate for new aircraft acquisitions over the next decade.

New aircraft deliveries also look to be healthier in the shorter term, with the combination of new model introductions and improving used aircraft market conditions bolstering acquisitions over the next five years. Moderate growth in North America and Europe should offset generally lower projected totals in that category for Latin America, Africa, the Middle East and the Asia-Pacific region.

“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 for global marketing at Honeywell. “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.”

Arguably the most welcome news comes from Europe, with long-term new business jet purchase expectations climbing to nearly 33 percent. That marks a 14 percent improvement over last year’s Honeywell outlook for the region, although persistently slow economic growth and ongoing Brexit concerns translate to more than 45 percent of those deliveries being scheduled for 2022 and beyond, with just 26 percent planned through 2020. Europe’s share of the estimated global five-year demand also increased to 16 percent.

North America continues to drive the lion’s share of the global business jet segment, representing 65 percent of current aircraft holdings and an estimated 61 percent of new aircraft acquisitions over the next five years, an increase of 1 percent over last year’s market outlook. About 36 percent of North American survey respondents stated they intend to schedule new aircraft purchases over the next two years, outpacing the global average of 30 percent.

The number of planned new aircraft acquisitions slipped by 7 percent in Latin America, primarily affected by NAFTA uncertainties in Mexico, with 22 percent of the region’s sample fleet expected to replace or add a new jet purchase over the next five years. Five-year business jet purchase expectations declined 4 percent in the Middle East and 1 percent for the Asia-Pacific region, but a notable strengthening in Brazilian planned aircraft acquisitions over last year’s forecast drove an overall increase in those totals for the BRIC (Brazil, Russia, India and China) countries.

According to Honeywell, global operators plan to make new jet purchases equivalent to about 20 percent of their fleets over the next five years as replacements or additions to their current fleet, an increase of 1 percent over the 2017 survey. In keeping with past years, larger-cabin aircraft are expected to account for more than 87 percent of all new business jet purchases through 2023.

Looking to the market for used business jets, year-over-year (YOY) inventory levels improved by 13 percent, fueling a slight increase in average asking prices for light jets and stable prices for medium-cabin aircraft, but lower asking prices for large-cabin heavy jets. While the number of jets less than 10 years old on the resale market decreased by 30 percent YOY, representing slightly more than five percent of the total in-use fleet, that number remains more than 20 percent of total preowned jet listings compared to pre-recession levels of 15-20 percent.

Survey respondents also reported higher fleet utilization across all regions except Asia in 2018. Honeywell altered its reporting methodology slightly for the 2019-2028 outlook, dropping current-year projected deliveries to better align with aircraft manufacturer forecast planning.

Read the complete Honeywell Business Jet Aviation Forecast.