Bombardier Forecasts 9,000 Business Aircraft Deliveries in 10 Years

This analysis focuses specifically on aircraft categories in which Bombardier competes: Light, Medium and Large, as well as major world regions.

THE BUSINESS JET MARKET IN 2014

In 2014, the business jet industry continued its path towards recovery, led by the strengthening North American economy. North American business jet orders and deliveries in the markets where Bombardier competes were strong in 2014, driven by solid domestic business investment, a thriving stock market and sustained consumer spending. However, orders and deliveries lagged in other regions as a result of several challenges which held back a broader recovery in the world economy. European GDP growth remained sluggish overall but gained some momentum in the later part of 2014.

China’s growth decelerated while Russia ended the year on the brink of recession due to falling oil prices and significant economic restrictions imposed by the Western world.

Last year the industry reached 601 aircraft deliveries, a 6 per cent increase from 2013. Demand for long-range business travel continued to grow, though at a slower pace, which resulted in a total of 200 deliveries for Large category aircraft. Medium category aircraft had 212 total deliveries, a modest recovery expected to accelerate as world GDP growth improves in upcoming years. Light category deliveries amounted to 189 aircraft, less than half the level of deliveries seen when the market peaked in 2008.

Having secured more aircraft orders and deliveries since the downturn in 2009 than any other manufacturer, Bombardier Business Aircraft continues to hold its position as industry leader. In 2014, Bombardier Business Aircraft delivered 204 business aircraft, amounting to 34 per cent delivery market share.

Bombardier’s 10-year forecast is 9,000 business aircraft deliveries valued at $267 billion.

KEY MARKET DRIVERS

Wealth Creation: The global economy is expected to continue improving. GDP growth is forecasted to cross the 3 per cent threshold by 2016-17.

Globalisation of Trade: Trade globalisation will continue, particularly with and between emerging markets, increasing the need for direct city-to-city access.

Emerging Markets: Fleet size in these regions is expected to continue growing as business jet adoption approaches mature market levels.

New Aircraft Programme: Several new models will enter service between 2015 and 2024 which will attract new buyers and stimulate replacement activity.

Replacement Demand: 1,825 worldwide business aircraft retirements forecasted over the next 10 years will drive increased replacements.

Accessibility: Operators in the charter and fractional market are renewing their fleets. International expansion will drive future growth.

Bombardier has forecast category-wise with light category accounting for 3,400 deliveries from 2015 to 2024; medium category 3,100 and large category 2,500.

REGION-WISE FORECAST

Bombardier states that North America, Europe, China and Latin America will be the largest markets for business aircraft over the next 10 years.

North America

Key Facts

• Birthplace of business aviation
• Largest market for business aircraft

2015-24 Outlook

• Average economic growth of 2.6 per cent per year
• Fleet compound annual growth rate of 2 per cent
• Will remain the largest market for business aircraft
• Forecasted to receive 3,900 deliveries valued at $96 billion
• Light and Medium category aircraft account for over 80 per cent of deliveries

Europe

Key Facts

• Second largest market for business jet deliveries 2015-24 Outlook
• Average economic growth of 1.8 per cent per year
• Fleet compound annual growth rate of 7 per cent
• Will remain the second largest market for business jet deliveries
• Forecasted to receive 1,525 deliveries valued at $50 billion
• Medium and Large category aircraft account for almost 70 per cent of deliveries

Greater China

Key Facts

• Exceedingly fast fleet growth over the last 10 years at more than 20 per cent per year

2015-24 Outlook

• Average economic growth of 6.5 per cent per year
• Fleet compound annual growth rate of 13 per cent
• Forecasted to receive 875 deliveries valued at $33 billion
• Medium and Large category aircraft account for 90 per cent of deliveries

Latin America

Key Facts

• Relatively mature market for business aviation
• Brazil and Mexico account for 60 per cent of the regional fleet

2015-24 Outlook

• Average economic growth of 3.3 per cent per year
• Fleet compound annual growth rate of 3 per cent
• Forecasted to receive 850 deliveries valued at $24 billion
• Light and Medium category aircraft account for 75 per cent of deliveries

CIS

Key Facts

• Business aviation in CIS began in the early 1990s
• Fleet has grown by nearly 7 per cent per year since the early 1990s

2015-24 Outlook

• Average economic growth of 2.4 per cent per year
• Fleet compound annual growth rate of 6 per cent
• Forecasted to receive 510 deliveries valued at $16 billion
• Medium and Large category aircraft account for over 80 per cent of deliveries

MIDDLE EAST

Key Facts

• Remains a promising market for business aviation
• Long distances between cities and difficult ground transportation justify the need for business aviation

2015-24 Outlook

• Average economic growth of 4.0 per cent per year
• Fleet compound annual growth rate of 7 per cent
• Forecasted to receive 400 deliveries valued at $15 billion
• Medium and Large category aircraft remain the aircraft of choice

ASIA-PACIFIC

Key Facts

• Geographic position necessitates the need for long-range aircraft

2015-24 Outlook

• Average economic growth of 2.5 per cent per year
• Fleet compound annual growth rate of 6 per cent
• Forecasted to receive 355 deliveries valued at $14 billion
• Large category aircraft account for close to 60 per cent of deliveries

SOUTH ASIA

Key Facts

• Continues to develop its regional business aviation market
• Infrastructure and regulatory environment continue to slowly improve

2015-24 Outlook

• Average economic growth of 7 per cent per year
• Fleet compound annual growth rate of 12 per cent
• Forecasted to receive 310 deliveries valued at $12 billion
• Large category aircraft account for over 50 per cent of deliveries

AFRICA

Key Facts

• Important market for business aircraft deliveries
• Fleet size has more than doubled in the past 10 years

2015-24 Outlook

• Average economic growth of 4.8 per cent per year
• Fleet compound annual growth rate of 5 per cent
• Forecasted to receive 275 deliveries valued at $7 billion
• Light and Medium category aircraft account for over 75 per cent of deliveries

In 2014, business aviation continued on its path towards recovery. Though industry orders lagged, deliveries increased by 6 per cent compared to the previous year. Over the next 10 years, Bombardier expects Large category aircraft will represent half of overall revenues at $137 billion while Medium and Light category aircraft will represent $91 billion and $39 billion respectively. Emerging markets like China, Russia and Latin America will once again be key drivers to future growth as current challenges in these markets subside.

Bombardier’s predicts a promising future for business aviation in the years ahead. With the most extensive product portfolio of any manufacturer, Bombardier said it is well positioned to lead the industry forward.