Thelatest Business Aviation Outlook from Honeywell Aerospace is a mixed bag. Itpushes back the prospect of an upturn in the sector until 2012. But the 10-yearforecast sees a 10 per cent rise in the value of total sales of new businessjets, compared with the same forecast last year, to more than $225m.
Thatreflects some substantial shifts in the market, including the growing trendfavouring larger aircraft, and long-term trends in the second-hand market thathave also influenced significant changes in the industry.
Concernsover general economic conditions will keep deliveries of new jets to 675-700this year, says Honeywell after surveying 1,200 corporate flight departmentsaround the world for its latest outlook, published on October 17 in the run-upto the annual convention of the US National Business Aviation Association in
Butwhile this is a far cry from the heady days of 2007 and 2008, when the annualrate of business jet deliveries exceeded 1,000, there is some positive news inthe outlook.
Accordingto Rob Wilson, president of business and general aviation at Honeywell, whileuncertainty over the pace of the economic recovery has knocked five-yearpurchase plans for new jets, especially additions to the fleet rather thanreplacements, the survey’s finding this year that respondents expect to buyaircraft equivalent to 30 per cent of their fleet is still among the top fourannual scores since 1993.
Alsonoteworthy is that sentiment on fleet replacement in
Expectationsof buying new jets fell sharply in the Middle East and
Asianpurchase plans plunged from the year before, but remained high compared withother regions. And
Meanwhile,usage rates continue to climb around the world, especially among very lightjets and ultra-long-range aircraft, with international flights recoveringfastest in the
“Ifyou look at the US Federal Aviation Administration data on business aviationdepartures to overseas destination, that’s 40 per cent up year on year,” saysMr Wilson. “That indicates there’s a strong demand for doing business acrossregions of the world.”
Butfractional operations are still having a tough time. Only three jets weredelivered to fractional operators in 2009 and the first half of 2010, saysHoneywell, which also says sales of ownership shares have fallen further after2009’s 52 per cent net slide.
Themarket for used jets continues to struggle with high inventories, despite afall to 15 per cent of the total global fleet from last year’s 17 per centaccording to Mr Wilson. Honeywell’s survey recorded a fall by European andLatin American respondents in plans to buy second-hand jets – but a rise in allother regions.
Earlierthis month, JP Morgan’s business jet monthly report said the fall ininventories had slowed, although it forecast the decline was likely to resume.
ButHoneywell, and others, are also reaping a benefit from the older aircraft onthe market. “In 2008, we made a conscious decision to invest heavily inupgrades and retrofits,” says Mr Wilson. “As recently as three years ago, forus this area was worth single-digit millions – today it’s in excess of $100m ofrevenue.”
Thisweek, Honeywell is announcing at the NBAA show a number of cockpit, engine andcabin upgrades to expand its business further in this area – and, of course, toallow customers to enhance the usability and resale value of older aircraft.
Oneinitiative is to cut by half the hours requirement for customers with someolder engines to join maintenance service programmes, which should let themcontinue operating their aircraft with more certainty about upcoming costs.
Accordingto JetBrokers Europe, launched last year as an affiliate of thelong-established JetBrokers of the
Hartsfield-JacksonAtlanta, the international airport serving the host city of this year’s NBAAconvention, is not unique in its ability to inflict extra delays.
Butthe performance of waiting for checked baggage at the end of an internationalflight, waiting in an extremely long line for another opportunity to take offmy shoes and put them through a scanner, then waiting still longer to claim thebag from the internal logic of an obviously confused system, is frustrating inthe extreme; especially so as tailwinds had propelled us from London an hour aheadof schedule.
“Welive here and it’s still ridiculous,” said another passenger, visibly wiltingas she waited.
Itis a presumably unwitting, but nevertheless powerful, reminder of the advantagesof private aviation. But then those who use private aircraft, such as thepeople climbing out of a Cessna jet under Signature Aviation’s huge,sun-shielding porch a day later, just up the road at DeKalb Peachtree airport,know that already.
DassaultAviation is announcing this week that it has selected most of the partners forits planned super-midsize Falcon business jet, code-named SMS, and has alreadyembarked on a design phase at its headquarter
Ina development of the process pioneered on the somewhat larger 7X, the designerswill then disperse again and work together in real time, from their differentlocations, on a single computer-generated, digital model. No need, then, forthe frequent physical meetings that business jets are so good at makingpossible.
TheFrench aircraft maker will not be the only one in trouble if this way ofworking really takes off.