Yesterday, Honeywell International Inc HON disclosed an encouraging Global Business Aviation Outlook, highlighting strong global demand for new business jets. As per the survey, the company saw higher five-year new jet purchase plans, up 2ppt vs. a year ago.
10-year Outlook: The company expects global demand for new business jets to stay strong over the coming decade, with projected deliveries of up to 8,500 new planes worth $278 billion from 2024 to 2033 (same as the 10-year outlook a year ago).
Honeywell anticipates new jet deliveries and expenditures to increase at an average annual rate of 2% over the next decade.
2023 & 2024 Outlook: The company projects new business jet deliveries to be up 10% Y/Y in 2024, with expenditures growth of 13% Y/Y.
Regarding business and private aviation, Honeywell sees global flight activity declining in 2023 and expects it to tumble further this year by about 4% Y/Y on inflation and the resumption of commercial air service on key routes.
Moreover, Honeywell notes a slowdown in the pace of new jet orders while OEMs aim to meet current demand by accelerating production rates over the next several years.
The company sees a stabilization in flight activity in 2024 and a return to growth in 2025, on an expected increase in IPOs, corporate profits, and easing inflation rates.
"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. 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 6% 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," stated Heath Patrick, president, Americas Aftermarket, Honeywell Aerospace.
Also Read: Honeywell Restructures Segments To Align With Powerful Megatrends, Reaffirms FY23 Outlook
Price Action: Honeywell shares closed lower by 0.21% at $183.56 on Friday.
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