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Honeywell sees strong demand for new business jets and fewer emissions
The intentions gathered are consistent with what the OEMs reported to investors in Q2, an increase in delivery pace during 1H23, which further aligns with industry efforts to scale up production in response to big backlogs.
Honeywell is excited that fractional operators intend to acquire several hundred new jets, including midsize and super-midsize jets powered by Honeywell HTF engines

Honeywell's 32nd annual Global Business Aviation Outlook forecasts up to 8,500 new business jet deliveries worth $278 billion from 2024 to 2033, in line with the same 10 year forecast a year ago. This year, surveyed business aviation operators reported higher five year new jet purchase plans, which is up two percentage points from a year ago. However, fleet expansion rates nearly tripled in 2023's survey compared to the decade average preceding 2020. The intentions gathered from respondents are consistent with what the OEMs reported to investors in Q2, an increase in delivery pace during the first half of 2023, which further aligns with the industry's efforts to scale up production in response to record-high backlogs.

"Our industry is on the upswing. Operators are showing confidence with plans to expand their fleets at a faster rate than any time in the previous decade. Notably, we are excited by the recent announcements from fractional operators indicating their intent to acquire several hundred new jets, including midsize and super-midsize jets powered by Honeywell HTF engines," says Heath Patrick, president, Americas aftermarket. "There's also a positive shift toward sustainability as operators are keen to reduce carbon emissions. Additionally, new users in business aviation have increased demand by 500 aircraft and six per cent more flights over the next 10 years. This, along with expected double digit increases in turbofan deliveries in 2023 and 2024, shows our industry's commitment to meeting growing demand."

Key findings include:

- New business jet deliveries in 2024 are expected to be 10 per cent higher than in 2023. Expenditures are expected to be 13 per cent higher.

- Five year purchase plans for new business jets are up two percentage points compared with last year's survey; this surpasses 2019 levels and is equivalent to 19 per cent of the current fleet.

- Fleet additions are up for the third year in a row, topping three per cent of the fleet.

- New jet deliveries and expenditures over the next decade are projected to grow at a two per cent average annual rate, in line with expected worldwide long-term economic growth.

- Nearly two-thirds of those surveyed expect to fly the same in 2024 versus 2023; 29 per cent expect to fly more and just seven per cent expect to fly less.

- Large, long-range and ultra long-range aircraft classes are expected to account for about 69 per cent of all expenditures of new business jets in the next five years.

- Four per cent of surveyed operators plan to dispose of an aircraft without replacement, which is double the rate gleaned in 2022; most citing retirement or death of the aircraft owner.

Honeywell is committed to reaching carbon neutrality by 2035 in its operations and facilities, and to driving aviation sustainability with a wide range of ready-now solutions that will support a more sustainable future for the sector. This year's survey, for the third consecutive year, features a dedicated section on operators' current and future plans to reduce their carbon footprint during operations.

- Almost 60 per cent of this year's surveyed operators report currently implementing at least one method to reduce their carbon footprint, which is 10 percentage points above last year's survey.

- The most frequently mentioned current method to reduce carbon footprint is 'fewer private jet trips in favour of commercial flying' (31 per cent), followed by 'slower cruising speeds' (18 per cent).

- 67 per cent of operators plan to either adopt or increase methods for more environmentally friendly operations in the future, and 40 per cent cite SAF as the most common way to achieve this goal.

- The survey asked the remaining 33 per cent what would compel them to adopt any methods to address sustainability in the future, and 65 per cent of these operators cited economic incentives such as tax benefits or operating cost savings followed by 44 per cent citing government regulations.

North American fleets account for 64% of the five-year new jet deliveries. This year's share is on par with last year's and is likely driven by 90 per cent of North American respondents believing that the economy will at least remain the same if not improve. This makes North America the most optimistic region in 2023.

European operators will make up 14 per cent of the five year new jet deliveries. This is one percentage point below last year's share, driven by economic uncertainty and a strong focus on sustainability in this continent.

Operators in the Latin American region will make up five per cent of global deliveries in the next five years, two percentage points below 2022's share. Nearly 70 per cent of Latin American operators report that local economic conditions will remain the same or decline in the near future, making this region the most pessimistic.

The Asia Pacific region will make up 11 per cent of new jet demand over the next five years, one percentage point up from the previous year. Operators here have seen the second-highest business aviation utilisation growth in 2023 behind only the Middle East.

Fleets in the Middle East/Africa will account for six per cent of the five year new jet deliveries. This is two percentage points above last year's share. This region accounted for the most growth in business aviation flights in 2023.

Five-year purchase plans for pre-owned jets total 27 per cent of the current fleet, just one percentage point below last year's results. After record-high demand for used jets the past two years, 2023 will see a slight increase in the inventory of jets available for sale.

In an update on new users of business and private aviation, Honeywell found that the business aviation industry experienced a surge in first-time private aviation users and buyers after the onset of the COVID pandemic. At certain points in 2022, this trend drove flight activity to levels not seen since 2007. However, in 2023, global flight activity declined and is expected to decrease this year by approximately four per cent compared with 2022. This decline can be attributed to factors such as inflation and the resumption of commercial air service on key routes.

Furthermore, the pace of new orders for jets has slowed down while OEMs focus on meeting current demand by significantly increasing production rates over the next several years. It is anticipated that flight activity will stabilise in 2024 and return to growth in 2025, driven by an accelerated pace in IPOs, corporate profits and easing inflation rates. Consequently, Honeywell will be able to assess in 2024 how many of these new users and buyers have remained in the business aviation sector and determine their long-term impact. However, a large impact is already being felt:

- 500 additional business jets: The pre-COVID 2020 long-term new jet delivery forecast contained just over 8,000 aircraft for the 2024-2033 period, while the latest 32nd Annual Honeywell Outlook forecasts 8,500.

- 2023 flight activity is still expected to finish at least 10 per cent above 2019 levels; if we assume a historically consistent average annual growth rate of one to two per cent, it can be anticipated that 2023 will conclude with flight activity two to six per cent above where the industry would have been if it had not been impacted by COVID.

The Global Business Aviation Outlook reflects current operator concerns and identifies longer-cycle trends that Honeywell uses in its own product decision process. The survey has helped identify opportunities for investments in sustainability solutions, has expanded propulsion offerings, innovative safety products, services and upgrades, and has enhanced aircraft connectivity offerings. The survey informs Honeywell's business pursuit strategy and helps consistently position the company on high-value platforms in growth sectors.

Honeywell's forecast methodology is based on multiple sources, including macroeconomic analyses, OEM production and development plans shared with the company and expert deliberations from aerospace industry leaders. Honeywell also uses information gathered from interviews conducted during the forecasting cycle with 100 non-fractional business jet operators representing a fleet of 206 business aircraft worldwide. The survey sample is representative of the entire industry in terms of geography, operation and fleet composition. This comprehensive approach provides Honeywell with unique insights into operator sentiments, preferences and concerns and provides considerable insight into product development needs and opportunities.

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