Honeywell.com 2009 Business Aviation Outlook€¦ · 2009 Business Aviation Outlook •23rd Year of...

Honeywell Proprietary

Honeywell.com

12009 NBAA Media Briefing

2009 Business Aviation Outlook

• 23rd Year of Survey, 18th consecutive public report release• 1,200 Corporate flight departments from around the world

– Aircraft Manufacturers and other sources

• 5 year purchase plans increased over 2008, but are delayed• International demand gains share• Significant delivery down cycle in 2009 and 2010

– Several programs suspended or delayed

• Long-term outlook for measured recovery– Up to 11,000 aircraft worth $200B projected from 2009-2019


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2009 Purchase Plans Improved Despite Recession

Business Aviation Environment – Mid-Year 2009

• Through Q2 2009 business jet deliveries - 407 aircraft worth $8.0 B25% decrease in units

24% decrease in constant 2009 dollars

• Several Hundred New Jet Orders repositioned during first half 2009:Book-to-Bill ratio negative since Q4 2008, after several years exceeding 2.0

Industry backlog deferred, still represents several years volume at expected rates

• Fractional industry net share gain / loss through Q3 2009 down 47%Fractional Segment took ~21 new jets through Q3 2009, off 76% from 2008 levels

• Business Jet flights down in U.S. and Europe – but positive trends emerging Level of decline improving since Q109

Longer range Aircraft monthly usage in the U.S. nearly back to positive territory


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World Business Jet Fleet & Operator Base

World Business Jet Fleet

16200 Business Jets 5 Yr. CAGR +5.5%

World Business Jet Operators

9,800 Jet Operators 5 Yr. CAGR +4.7%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Airc

raft

Uni

ts

OceaniaAsiaAfricaEuropeLatin AmericaNorth America

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Ope

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nt

OceaniaAsiaAfricaEuropeLatin AmericaNorth America


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2009 Purchase Plans IncreasedOperators Looking Ahead to Economic Recovery

Five Year Purchase Plans for New Jets

0%

10%

20%

30%

40%

50%

Fle

et

Rep

lac

em

en

t &

Ex

pa

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ion

Pe

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AdditionsReplacements

25%

32%33%

25%

23%24% 25% 26%24%

14%

30%

22%23%21%

13%14%14%

40%


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Purchase Expectations by Region

Significant Global Demand Still Present –North America, Latin America More Conservative

79%

51%47%

38%

20%

50%44%

40%45%

25%

58%55%

59%

40%

25%

0%

20%

40%

60%

80%

100%

Asia Middle-East/Africa Europe Latin America North America

5 Y

ea

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ep

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nd

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20082009


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International Share of Demand Continues to Increase

North America, 48%

Europe, 27%

Latin America,

11%

Asia/Pacific, 7%

Africa / Middle East, 7%

Traditional Corporate & Charter Operator Base

Regional Demand for New Jets in the Next 5 Years


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New Jet Purchase Mentions by Class

40%

36%

24%

Purchase Plans Unit Share

68%

25%

7%

Purchase Plans - Value

Big Cabin Jets Captured 40% of Mentions and ~70% of $Value

Large Cabin(Large Through Business Liner)

Large Cabin

Medium Cabin(Light Medium Through Super Midsize)

Small Cabin(Personal Jet Through Light)

Medium Cabin

Small Cabin


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Purchase Expectations for Used Jets

Continued Decline in Near Term Used Jet Interest

14%15%

8%

15%15%

8%8%

13% 13%

17%

26%

5%

13% 13%

31%

22%

9%8%

41%

9%

27%

14%

9% 9%

27%

9%

15%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

World Asia Middle East/Africa

Latin America

Europe North America

20052006200720082009

5 Year Replacement and Expansion percentages50%

• Large increase in used jet inventory for sale since mid 2008 has peaked and begun to fall slightly

• ~17% of active fleet listed for sale

• ~900 late model jets under 10 years old listed.

• 40% are Very Light and Medium class aircraft

• Other classes up to lesser degree

• Average asking prices declining significantly for all models

• Forward look at used jet purchase plans in 2009 survey fell again

2009 Used Jet Trends


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0% 5% 10% 15% 20% 25% 30% 35% 40%

Range

Age

Bigger Cabin

Updated Avionics

Operating Costs

Bigger Cabin

Bigger Cabin/Fuel Use

Range

Age

Warranties

Operating Costs

Age

Bigger Cabin/Op Cost

New Technology

Age

Asia

Latin

America

Europe

North

America

Efficiency and Operating Costs Gained Importance

Middle East /

Africa

AgeUpdated AvionicsNew Technology

More RangeBigger Cabin/Op Cost

AgeBigger Cabin

Operating costMore Range

Warranties

AgeUpdated Avionics

More RangeOperating Cost

Bigger Cabin/Fuel Use

Bigger cabinAge

Operating CostMore Range

Updated Avionics

Bigger CabinOperating cost

AgeWarranties

More Range

Reasons for New Jet Purchase – 2009 Survey


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July 2009 Outlook for Business Jet Deliveries

V Light

Light

Lt-Med

MediumMed-Lrg

LargeLong Range

Ultra Long Range

Very High Speed/ULR

0

200

400

600

800

1000

1200

1400

Airc

raft

Uni

ts

History Forecast

10,000-11,000 New Jets from 2009 - 2019


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~$200B from 2009 - 2019

July 2009 Outlook for Business Jet DeliveriesConstant 2009 Dollars

V LightLight

Lt-MedMediumMed-Lrg

Large

Long RangeUltra Long Range

Very High Speed/ULR

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Co

nsta

nt

$ 2

009

History Forecast


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Conclusions• Deliveries will cycle down in 2009 and 2010:

– Peak-to-trough decline will be in a range of 40% or more

• Operator survey signaling a potential recovery :– Global Insight indicates that a moderate global economic recovery has begun – Weak dollar will have positive impact on International sales– Number of jets per UHNWI in emerging markets far below potential– Recovery in new aircraft deliveries will begin in 2011/2012

• Pipeline of new high value models still supports longer term growth• Net new jet orders expected to be positive in 2010 and accelerate in 2011• Very light segment production ramping up – backlogs appear to be holding• Signs of stabilization in fleet utilization and used aircraft:

– U.S. and European flight activity stabilizing– Improvement in jet utilization expected to begin in 2010, coincident with global economic recovery

Longer Term New Jet Outlook Positive –Operator Survey Signaling a Measured New Jet Demand Recovery

Honeywell.com 2009 Business Aviation Outlook€¦ · 2009 Business Aviation Outlook •23rd Year of...

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