Honeywell Projects 8,500 Jet Deliveries in the Next Decade: A Comprehensive Outlook on The Global Aviation Market 2023-2035
RELEASE DATE: Oct 2024 Author: Spherical Insights Request Free Sample
Honeywell's 33rd Annual Global Business Aviation Outlook report indicates that the business aviation market is poised for steady growth. According to Dickie Davis, Vice President of Marketing for Honeywell's Business and General Aviation unit, there is an anticipated significant increase in demand for air travel services over the next decade, with forecasts predicting the delivery of 8,500 new business jets valued at $280 billion. This projection reflects a return to normalized purchase plans akin to pre-pandemic levels, highlighting a robust demand for new aircraft. The blog describes the main takeaways from the report by breaking down trends already in motion and shaping the industry, with an insinuation of what effect this will have on all stakeholders involved in the world of business aviation.
Demand for business jets will be at an increased rate as a consequence of the projection provided by Honeywell.
Reportable for this year, rolling five-year purchase plans are 18% of the current fleet, similar to earlier years. New jets arrive with year-over-year year increases of 12%, and expenditures rise by 11%, all very characteristic and confident trends of normalized demand that will have a bright future in business aviation. Heath Patrick, Americas Aftermarket President for Honeywell Aerospace Technologies, opined that the market has now become healthy and growing, and he believes that this growth momentum will continue. On the expectation of maintenance activity, respondents are positive as 90% or more said that they expect flight hours to be steady or improving in 2025.
Fleet Utilization and Acquisition Preferences
One significant area that Honeywell discusses in its forecast is the aircraft usage that is anticipated. In addition to planning increases in flight activity, operators are adding to their fleets with new purchases. It is said that large jets will account for about two-thirds of new business jet expenditures during the next five years, the report said. Therefore, this demand for large jets reflects the performance and cost-effectiveness operators require, as 82% of respondents said that one of their top three purchase criteria for new aircraft - performance, closely followed at 60% by considering costs.
Changing customer preferences and the addition of new aircraft models are also demanded in the air market. Present-day jets promise efficiency, comfort, and superior operating capabilities, which have been attracting more operators.
Regional Perspective: North America is leading, Latin America offers hope
Regional trends follow the market to identify North America as the largest market for new jet deliveries, at 66% of the five-year forecast. Its economic strength and high density of business aviation operations easily place it here. European operators are only estimated to account for 13% new jet deliveries, under slight strain from increasing sustainability concerns and the likes.
Conversely, operators in Latin America continue to look positive for upward movements, with a 10% share of new deliveries projected, a 5% increase from the prior year. Growth within this region is particularly strong in Brazil, which continues to enjoy performance growth above the world average. Operators here feel positive toward macroeconomic conditions that will continue to boost demand for business aviation.
The Asia Pacific region will take the lion's share of new jet deliveries at 7%, while the country continued to demonstrate resilience, with flight activity up nearly double digits from the previous year. In stark contrast, the Middle East and Africa region continues its downward trajectory, representing just 3% of new deliveries, which partly is a result of continued geopolitical conflict issues affecting daily flight operations.
Preowned Aircraft Market: Comfortable Resilience at New Highs
The historical low inventory environment of the pre-owned aircraft market is slowly stabilizing, with inventory expected to go up at a slow pace in the future. Pre-owned aircraft values are high, signifying steady demand; operators are more likely than ever before to increase their fleets by purchasing pre-owned aircraft, and the approach seems to be reflecting a shift toward market normalcy.
Sustainability Initiatives: Emphasis on Environmental Responsiveness
As the aviation industry continues to struggle with its ecological footprint, Honeywell's report highlights the imperativeness of business aviation sustainability. However, operators point to the simplest means of reducing their ecological footprint is through the purchase of new, fuel-efficient aircraft, where 85% of respondents consider this method to be "very effective" or "moderately effective." New aircraft have been introduced into only 60% of the active sustainability-oriented operators' fleets.
Also, through the use of sustainable aviation fuel (SAF), where 55% of proactive operators have already started to use SAF. The survey does indicate, however that there are challenges for the widespread adoption of SAF, including the cost and the availability. High costs is cited by 75% of operators as the biggest obstacle. Such challenges require continued innovation and investment in sustainable practices across the industry.
Implications for Stakeholders
The results of Honeywell's Global Business Aviation Outlook are of key importance to a multitude of stakeholders in the industry. Manufacturers need to be receptive to the increase in demand for large jets and to continue innovating and improving the performance of their aircraft. Operators also have to make smart purchasing decisions, balancing immediate needs with long-term sustainability goals.
The aviation financing landscape has its role in participating financial institutions must also address the shift that comes with trends. With the continuous demand for new aircraft and a healthy pre-owned market, bound opportunities will exist. Stakeholders then have to focus on sustainable practices; it reflects the industry's direction and the regulatory anticipations.
Conclusion
Altogether, Honeywell's projection of 8,500 new business jet deliveries in the next decade speaks to a long-term future heavily comprised of intense growth for the business aviation industry, as the demand for new aircraft is stabilizing at the levels above those recorded pre-pandemic and operators' expectations for future flight activity are high. Regional dynamics typically paint an internally conflicting picture, with North America as the standout leader and Latin America rediscovering its promise.
Because sustainability is ever more important to the aviation industry, its course will serve to fulfill commitments that speak to environmental responsibility. Stakeholders will be prudent to be nimble and responsive to these trends if they are to capture the opportunities that will flow from them. With healthy growth forecasts and changing operator preferences, business aviation begins a decade of change.
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