Business jet sales are soaring again, with nearly 9,500 new aircraft valued at $280 billion projected to be delivered globally by 2024, according to Honeywell.
The forecast reflects an approximately 7% increase in the anticipated delivery value from 2013, the multinational conglomerate reported in its 23rd annual Business Aviation Outlook. The increase is driven by manufacturers delivering more business jets, modest bumps in list price and popular demand for larger models.
Honeywell projects 650 to 675 jet deliveries in 2014.
A growing global economy and the introduction of new aircraft models is helping spur business jet sales, Brian Sill, president of Business and General Aviation at Honeywell Aerospace, said in an October 2014 statement.
Honeywell’s optimistic outlook comes as the Federal Aviation Administration predicts the number of U.S. airline passengers will top 745 million in 2014, up slightly over the previous year. In 20 years, an estimated 1.15 billion passengers will be flying on U.S. airlines annually, the FAA projects.
That’s good news for an aviation industry that has had to cope with the aftermath of the Sept. 11, 2001, terrorist attacks, the economic downturn of the Great Recession and steep increases in the cost of fuel.
Honeywell released its annual outlook on the eve of the 2014 National Business Aviation Association’s convention and exhibition, which drew more than 20,000 airline executives, aviation managers and other industry professionals to Orlando, Florida.
Operators are expected to make new business jet purchases equivalent to about 23% of their fleets over the next five years, either as replacements or additions. That’s slightly below the expectations of Honeywell’s last four outlook reports but within pre-recession levels.
In the coming years, about 75% of spending on new jets will be in the large-cabin aircraft category, including business liners, according to Honeywell’s forecast. However, Sill said there is rising interest in midsize and small-cabin models.
North American aircraft operators account for 59% of projected demand in 2014, down slightly from 2013, which was the first year that demand increased in three years. Elsewhere, 29% of operators in the major, emerging markets of Brazil, Russia, India and China – known as the BRIC nations – reported plans to purchase jets this year. That’s a steep decline from the 42% reported in 2013 but still higher than the global average of 23%, according to Honeywell’s outlook.
Honeywell also reported a decline in the number of pre-owned jets for sale. Those aircraft represent about 10% of the current business jet fleet worldwide, a drop from the 2009 high of almost 16%.
“Current levels are normal in light of the past decade's history; meanwhile, asking prices continue to drift lower,” the report noted.