Business jet makers will deliver fewer planes next year, deepening a downward spiral caused by slow global growth, political tensions and low oil prices, according to a forecast Honeywell International Inc released on Sunday.
The forecast anticipates a low single-digit percentage decline in the number of jets delivered in 2017 as buyers wait for models arriving in 2018 and 2019, Honeywell said in its 25th annual survey of corporate flight departments.
“The downside is that there is still an awful lot of uncertainty and political turmoil in every region, and slow- growth economies. And you also have the uncertainty of the U.S. elections,” said Charles Park, director of market analysis for Honeywell, an aerospace components supplier.
The survey of more than 1,500 non-fractional business jet operators shows expectations for 650 to 675 new jet deliveries in 2016, down from 693 in 2015. The 2015 tally was up slightly from 692 jets in 2014, Honeywell said.
The company cut its 10-year outlook for business jet deliveries, saying it expects plane makers to supply 8,600 new jets valued at $255 billion through 2026, down from 9,200 jets worth $270 billion it forecast last year.
Buyers want aircraft from the “super mid-size” class and up, including ultra-long-range jets and business jetliners, Honeywell said. It predicts 85 percent of new business jet purchases over the next five years will come from these categories. Major plane makers of these types of jets include Bombardier, Gulfstream and Dassault.
Business jet owners are not flying significantly more, keeping plane usage near recent lows. But there is more interest in purchases from buyers in China, Brazil, Russia and the Middle East, Honeywell said.
The inventory of used planes for sale – another drag on new plane sales – has fallen to about 10 percent of the global fleet from about 16 percent in 2009. Honeywell said.