Business jet sales expected at $18.4 billion this year

Business jet sales are expected to rie 8 per cent since last year to reach $18.4 billion this year, a sign of further economic strengthening, Reuters reported citing a Honeywell Aerospace forecast.

According to the forecast continued recovery was expected from the economic low of 2009, and for increasing demand for bigger jets with longer range, including those made by Bombardier Inc and Gulfstream, a unit of General Dynamics Corp.

Given the higher cost of the bigger jets, overall spending could be expected to rise, even as the actual number of jets sold was expected to decline by 1 per cent as against last year due to problems in the supply chain that impacted manufacturing, the report said.

Honeywell expects 9,250 new business jets worth over $250 billion to be delivered though 2023.

The number of jets expected to be purchased in Asia over the next five years was down in the latest survey from a year ago, indicating economic weakness in the region.

Further, the Asian share of global demand over the next five years would be expected to decline to 5 per cent from 7 per cent, according to the survey.

Asian jet purchases are expected at equivalent to 24 per cent of business jet operators' fleet over the next five years, lower than the expected 34 per cent in last year's survey.

According to Rob Wilson, president of Honeywell's business and general aviation division, purchase expectation in China held strong. He added in Asia orders in China dropped, with slow growth in India.

According to the survey, the share of global demand in Latin America held steady at 18 per cent which pointed to continued economic strength.

In Latin America jet buyers are expected to replace or add to the equivalent of 39 per cent of their fleets over the next five years, with most purchases expected in the next three years, partly due to older fleets in the region, especially in Brazil.

The latest survey showed the share of global jet purchases in North America jump to 61 per cent from 53 per cent a year ago, partly due to economic recovery. The fleet turnover expectation increased to 28 per cent over five years, as against 25 per cent previously.

Europe's share of global demand fell to 12 per cent from 18 per cent, while purchase expectations fell to 25 per cent, well below the 30 to 33 per cent figure reported in the past three years.