Honeywell predicts a rapid rebound in the business aviation market as flight time and procurement programs grow

Global business jet flight hours are expected to increase by nearly 50% in 2021 compared to a year ago, surpassing pre-pandemic levels

The 30th Global Business Aviation Outlook predicts that 7,400 new business jets will be delivered over the next 10 years, with a total value of $238 billion

90% of operators said their plans to purchase new or used aircraft were not postponed due to the pandemic

Business jet operators say there has been a significant increase in pre-owned aircraft procurement programs

SHANGHAI, China, Oct. 26, 2021 – Honeywell's (NASDAQ: HON) 30th annual Global Business Aviation Outlook forecasts that 7,400 new business jets will be delivered from 2022 to 2031, with a total value of $238 billion, up 1% from the 10-year forecast in the previous report. In 2021, according to business jet operators surveyed, pre-owned business jet procurement plans increased significantly by about 800 units, a 12% increase from the number reported last year. Business jet manufacturers also announced a significant increase in aircraft orders, indicating that the industry is almost free from the impact of the pandemic.

"Demand for pre-owned business jets is expected to exceed 6,500 over the next five years, putting pressure on already record-low inventories and driving additional demand for new business jets," said Heath Patrick, president, Aftermarket, Americas, Honeywell Aerospace. Our latest Operator Survey shows that private jet usage will continue to grow, as more than 65% of respondents expect business jet usage to increase in 2022. Despite the ongoing challenges posed by the pandemic, flight hours have recovered and surpassed pre-pandemic levels. The overall health of the business jet market is good, and growth is expected to continue. ”

Highlights from Honeywell's 2021 Global Business Aviation Outlook report:

This year's survey results show an increase in pre-owned aircraft purchasing programs. Global operators said they expect 28% of their fleets to be replaced or expanded by pre-owned aircraft in the next five years, up 3 percentage points from the 2020 survey. In terms of billing units, business jet deliveries in 2022 are expected to increase by 10% compared to 2021.

The forward market forecast for 2031 is in line with long-term global economic growth expectations, with deliveries growing at an average annual rate of 3%.

Compared to last year's survey, the five-year procurement plan for new business jets is down 2 percentage points. This can be attributed to the uncertainty caused by the Delta variant at the time of the survey, as well as the decrease in the number of replacements in the fifth year; However, the number of fleet sizes increased by 1 percentage point.

The sharp increase in demand for pre-owned business jets, coupled with record-low inventory levels of pre-owned business jets, will inevitably drive additional demand for new business jets. Of the new business jet procurement plans for the next five years, 29% is expected to take place in the next two years, which is only 1 percentage point lower than last year's survey results.

Operators plan to purchase new aircraft equivalent to 14% of the size of their existing fleet over the next five years to replace or expand their existing fleet.

Large business jets, such as large cabins and heavy aircraft, are expected to account for more than 72% of total new business jet spending over the next five years.

The continued impact of the pandemic in 2021 has been minimal:

Nine of the 10 operators surveyed said their plans to purchase new or used phones had not been delayed due to the pandemic. Almost all respondents said they had not canceled or planned to cancel new deliveries.

Year-to-date, trends in the use of business aviation show that flight hours in 2021 increased by nearly 50% compared to 2020 and approximately 5% more than in 2019 (before the pandemic).

65% of global respondents expect them to operate their business jet fleet more frequently in 2022 than in 2021.

Survey respondents said that the pandemic has not affected sales of new models. Specifically, only 4% of respondents plan to sell one or more aircraft without replacing them in the next five years, compared to 10% in last year's survey.

Only a small number of respondents (6%) reported that the condition of their flight department deteriorated in 2021.

Regional procurement plans

North America – The five-year new aircraft procurement program in North America decreased by 3 percentage points compared to last year due to lukewarm expectations from operators for the fifth year of the survey period. This may be due to the uncertainty created by the Delta variant of the coronavirus among small aircraft operators. The second-hand purchase plan increased by 4 percentage points.

Compared to last year, the North American new machine purchase plan is down 3% this year. It is expected that over the next five years, at least 13% of the fleet will be purchased for replacement or addition.

About 35% of the operators surveyed plan to complete the purchase within the first two years of the five-year plan. This result is 3 percentage points higher than last year and higher than the global average of 29%.

Compared to last year's survey, the purchase plan for used phones increased by 4 percentage points, which is higher than the historical average.

It is estimated that 63% of the global demand for new aircraft will come from North American operators over the next five years, down just 1 percentage point from last year's survey.

EUROPE – European operators' new aircraft purchase plans fell 5 percentage points year-on-year due to uncertainty caused by the Delta variant forcing governments to restrict cross-border travel.

This year, the European regional procurement plan fell to about 19% of the fleet size, down 5 percentage points from last year's results. Over the past few years, operators have updated their aging fleets, resulting in high purchase expectations in Europe.

About 23% of operators plan to arrange new procurement plans in the next two years, in line with last year's results and below the global average of 29%.

Replacement and expansion plans for pre-owned aircraft in Europe are at their highest level in recent years, equivalent to 34% of their fleet, up 6 percentage points from 2020.

Over the next five years, Europe's share of global demand is estimated at 16 percent, down 2 percentage points from last year.

Latin America – Purchase plans returned to 2019 levels, up 6 percentage points from last year.

In Latin America, 21% of fleets are expected to be replaced or expanded over the next five years, up from 15% in last year's survey.

About 29% of the region's procurement plans are expected to be completed between 2021 and 2023, which is on par with the global average.

Latin America regional demand will account for 5% of total projected business jet demand over the next five years, compared to 3% in last year's survey. This growth may be based on a more positive economic outlook after the deep pessimism experienced in the region last year.

Asia-Pacific – Sourcing programs are growing despite persistent geopolitical and commercial tensions.

APAC operators report that they expect new aircraft procurement plans equivalent to 15% of existing fleet size over the next five years, up from 14% in the 2020 survey. For the first time in three years, Asia-Pacific operators have signaled their intention to expand their fleets, which are 0.3% of their current fleet.

According to a clear procurement plan, demand in the Asia-Pacific region will account for 12% of global demand for new machines over the next five years.

About 20% of respondents in APAC plan to schedule a new procurement program in the first two years of the next five years, up from 30% a year ago.

Middle East & Africa (MEA) – Five-year low for 2021 procurement plan.

Nine per cent of respondents said they had plans to replace or purchase new machines, down from 16 per cent last year.

About 13% of operators surveyed plan to schedule new procurement plans in the first two years of the next five years, down from 46% a year ago.

The Middle East and Africa (MEEA) is expected to account for 4% of global demand over the next five years, in line with historical levels of 4% to 6%.

Pre-owned business jets

Plans to purchase used business jets over the next five years have increased by about 4 percentage points from last year's survey results. Over the next five years, 29% of used business jets will be traded, compared to a five-year forecast of 25% in 2020.

Influencing business decisions

The Global Business Aviation Outlook reflects not only the current focus of operators, but also the ability for Honeywell to identify long-term trends in its product decisions. The survey helps Honeywell identify investment opportunities in areas such as flight efficiency upgrades, propulsion system optimization, innovation in safety products, services and upgrades, and connected aircraft. The survey also helps guide Honeywell's business direction and strategy, and helps Honeywell stay on a high-value platform within growth areas.

Honeywell predicts a rapid rebound in the business aviation market as flight time and procurement programs grow

Honeywell predicts a rapid rebound in the business aviation market as flight time and procurement programs grow

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