defense-aerospace.com
all the defense and aerospace news
defense news
aerospace news
AlliedSignal Aerospace Forecasts $89-Billion MarketFor New Business-Jet Aircraft Through 2010
ATLANTA---AlliedSignal Aerospace's 8th annual Business Aviation Market Outlook projects continuing strong demand for new business aircraft, with deliveries of 6,800 units, valued at nearly $89 billion, for the period 2000-2010.
Based on its 1999 customer expectations survey, an assessment of manufacturer production forecast inputs, a value analysis of future new aircraft introductions and computerized aircraft-demand models, AlliedSignal Aerospace's Business Aviation Market Outlook projects a strong near-term market for traditional business aircraft (gross take-off weight (GTOW) less than 100,000 lbs.).
The survey showed that market growth will be driven by the impact of new and derivative aircraft models entering service with corporate flight departments, as well as by rapidly expanding fractional- ownership plans. After cresting in 2000, deliveries will remain at or near record levels before climbing again toward the end of the decade.
AlliedSignal Aerospace found the demand for airline-transport- category aircraft configured as business jets to be unchanged from 1998 levels of about 170 aircraft, worth approximately $7.6 billion, between 2000 and 2010.
Aircraft backlogs continue to maintain the record high levels established last year, and first-half-1999 deliveries of turbofan aircraft rose 27% over first-half-1998 levels. The corresponding dollar value of those deliveries increased by more than 40%.
AlliedSignal Aerospace expects operators to take delivery of approximately 605 new business-jet aircraft in 1999 (up from 510 a year ago) and 680 in 2000. "As business aviation enters a new millennium, confidence in the strength of the U.S. economy, the continuous development and introduction of numerous new jet models across the user spectrum, and the improved business conditions in Europe and Latin America are the most important factors driving this market,'' said Rob Ruck, vice president and general manager, Business & General Aviation, AlliedSignal Aerospace.
"Corporations around the world continue to expand their purchase expectations for business aircraft, both in the short term and over the next 10 years, and many will choose AlliedSignal Aerospace products such as our new AS900 turbofan engine and our family of safety avionics like EGPWS, TCAS and predictive windshear.''
Purchase Expectations Survey
The latest survey of business aircraft showed that operators' expectations for the purchase of new turbofan-powered aircraft reached record high levels this year. Based on input from more than 1,000 flight departments in North America, Latin America and Europe, the five-year world-market extrapolation for new business-jet deliveries rose 24% over last year's results. Purchase expectations are at record levels in each of the three regions surveyed.
AlliedSignal Aerospace's outlook for deliveries of new business jets for the five-year period 1999-2003 is for about 2,900-3,300 aircraft, a 59% increase over the previous five-year period, when more than 1,800 new jets were delivered.
Purchase expectations have remained consistently high for the last five years, reflecting worldwide economic strength, operators' optimism regarding the future and strong interest in new models, which in this year's survey accounted for nearly 40% of all jets mentioned for purchase during the next five years.
"The growing importance of aircraft as a business tool, the continued expansion of fractional ownership, which brings new customers to business aviation, and the development of ever more capable aircraft models continue to stimulate customer demand,'' Ruck said.
The fractional-ownership market continues its rapid growth by extending the benefits business aviation offers to the many new customers that fractional ownership reaches. More than 200 new aircraft orders and options have been placed this year.
Fractional ownership is expanding business-aircraft ownership well beyond the historical operator population. The majority of fractional-share owners are customers who have never owned an aircraft and many fractional owners are private companies or individuals. Despite record growth, AlliedSignal Aerospace believes only a small percentage of this market has been developed.
Participation in fractional-ownership plans by traditional corporate operators remains relatively limited. The survey noted a continued small increase in fractional interest from traditional flight departments as a supplement to their existing service, but levels remain too low to indicate any significant shift in aircraft- purchasing patterns.
North America remains the strongest and largest business-jet market, with operators saying they will replace or expand the equivalent of about 31% of their existing jet fleet with new aircraft during the next five years.
This year's survey data indicated that about 78% of all new jets will be sold in North America during the next five years. This level represents almost a 4% decline in the share of purchases projected in North America in last year's survey, as expectations increased strongly in both Europe and Latin America.
In North America the expected age at which aircraft are projected to be replaced dropped by more than a year from last year's results. Aircraft age and larger cabin passenger space were the most frequently mentioned reasons by North American operators for acquiring new jets. Improved range, speed and performance were other key factors cited as replacement reasons for current aircraft.
The two other regions surveyed -- Western Europe and Latin America -- showed sharp increases in new jet purchase expectations, vs. last year's survey results.
Citing improvements in the economy and regulatory changes, purchase expectations in Europe increased strongly from a year ago and are currently at an all-time high. European operators say they expect to expand or replace the equivalent of 29% of their current jet fleet in the next five years, compared with 17% last year.
Aircraft age and a requirement for improved cabin size were most frequently mentioned as reasons for expecting to purchase new jets. More range and improved speed/performance were also cited. The anticipated age at which new aircraft will be replaced by European operators decreased by more than two years, reflecting the sharp increase in purchase expectations.
New models continue to be important in stimulating the European operators' purchase expectations. Almost half of the jets European operators expect to take delivery of during the next five years are all new or derivative models.
Stimulated by improving economies and political stability, Latin American operators expect to replace or expand the equivalent of 25% of their current aircraft fleets with new jets during the next five years, up strongly from the 14% rate reported in the 1998 survey, and in keeping with the trends established prior to 1998.
Aircraft age and larger cabins were mentioned most frequently as reasons for expecting to purchase new jets. The average age at which aircraft are to be replaced by Latin American operators fell to 12 years in this year's survey, reflecting historical replacement ages.
While operators in Asia were not surveyed, AlliedSignal Aerospace remains optimistic for the prospects of long-term business aviation growth in the region. The Asian business-jet fleet has remained virtually static over the past two years but AlliedSignal Aerospace's 10-year projection shows an overall 5% annual business-jet-fleet growth rate through 2010 based on anticipated economic recovery within the region.
The 1999 Purchase Expectations Survey queried more than 1,000 chief pilots and flight department managers of companies operating almost 2,100 aircraft worldwide. The survey detailed the types of aircraft currently operated and assessed specific plans to replace or add to the fleet with new aircraft.
The Aircraft Outlook presents a snapshot of expected business aircraft sales at a point in time and does not reflect the impact of unforeseen events, such as a major economic contraction, sharp increases in fuel costs or a fuel crisis, new taxes or user fees, that would affect expected sales in future years. The Market Outlook primarily focuses only on traditional business aircraft with GTOW less than 100,000 pounds.
Business Aviation Market Outlook
Industry growth scenarios over the next decade projected by AlliedSignal Aerospace's Business Aircraft Outlook indicate significant trends in various market segments:
Jumbo and Global: Deliveries of these aircraft are expected to jump from 86 in 1998 to 116 this year. The Aircraft Outlook anticipates that this market will achieve a near-term peak as initial pent-up demand for this class of aircraft is satisfied. For the period 2000-2010, AlliedSignal Aerospace forecasts worldwide deliveries of 886 jumbo and global aircraft. Cabin comfort, range and speed of these aircraft are significant purchase factors. In addition, fractional-ownership plans continue to extend access to this class of aircraft to a larger customer base. Aircraft included in this category are the Falcon 900EX and Falcon 900C, Gulfstream IVSP, Global Express and Gulfstream V.
Large: AlliedSignal Aerospace forecasts deliveries of 660 aircraft in this category for the period 2000-2010. Aircraft cabin size/comfort and range are significant purchase factors for this class of aircraft. Fractional-ownership programs are also contributing significantly to aircraft demand in this segment. Aircraft included in this category are the Falcon 2000 and Challenger 604.
Medium and Medium-Large: AlliedSignal Aerospace forecasts market deliveries of 1,700 aircraft in this class by 2010. The medium-large or ``super midsize'' class aircraft like the Continental, Falcon 50EX, Hawker Horizon, Citation X and Galaxy have large market growth potential due to high perceived customer value. The medium segment includes successful models currently in service and those popular in the fractional-ownership markets like the Hawker 800XP, Citation VII and Learjet 60.
Light and Light-Medium: OEM backlogs remain strong and AlliedSignal Aerospace anticipates deliveries of almost 2,400 of these aircraft by the end of the next decade. Aircraft in this class have strong survey interest in all regions and the market should continue to be stimulated by the introduction of new models.
Aircraft in this market include the Learjet 31A and new Learjet 45, Citation Excel, Citation Encore, Citation Bravo and Beechjet 400A.
Entry: Demand of this class of aircraft continues to remain strong. This segment offers significant growth potential with good aircraft value and new models being introduced. AlliedSignal Aerospace forecasts deliveries in excess of 1,200 jets in this class during the next 11 years. During the latter half of the forecast period, the emergence of a new generation of low-cost turbofan aircraft is anticipated. This new class of jets will be based on technologies under development today and will form an affordable jet alternative to the upper-end turboprop market. Aircraft in this market segment include the Sino-Swearingen SJ30-2, Premier I and the Cessna CJ I and CJ II.
AlliedSignal Aerospace, a $7.5-billion unit of AlliedSignal Inc., is the largest supplier of aircraft engines, equipment, systems and services for commercial transport, regional, general aviation and military aircraft.
-ends-
AlliedSignal Aerospace Forecasts $89-Billion MarketFor New Business-Jet Aircraft Through 2010