Montreal-based jet maker Bombardier Aerospace says indicators are mixed, yet trending positively in the worldwide business and commercial aircraft markets. The company released its annual 20-year forecast today, predicting growth in both sectors as aging fleets and new technology drive the need for newer, better aircraft.
Bombardier says it is confident in the strong, long-term potential for the business aircraft industry, calling for 24,000 business jet deliveries in the light, medium and large industry categories between 2012 and 2031, valued at $648 billion. The company says it expects 2012 deliveries to be in line with 2011, with a return to sustained growth starting in 2013.
Regionally, Bombardier predicts the strongest growth in North America, followed by Europe and China. Key growth regions in the business aircraft market over the next 20 years include Brazil, India, Russia and the Commonwealth of Independent States (CIS), Indonesia, Mexico, South Korea and Turkey.
The company’s 20-year view of the 20- to 149-seat commercial aircraft market calls for 12,800 deliveries from 2012 to 2031, which will generate more than $630 billion in sales. This represents a 2% decrease compared to last year's forecast, mainly due to a lower GDP forecast and a sharp increase in the forecasted oil price, the company said.
Looking ahead, the forecast calls for a continued shift toward emerging markets, and Bombardier says it has increased its commercial aircraft team in emerging regions to meet demand. Despite that trend, North America is expected to lead the way in commercial aircraft deliveries over the next 20 years, followed by China, Europe, Russia and the CIS.
Need to upgrade, replace existing equipment
The Bombardier Commercial Aircraft Market Forecast predicts that more than half of the current commercial aircraft fleet will be replaced in the next 20 years—a slightly greater percentage than expected last year. Technical obsolescence, cost inefficiencies and age are driving the increasing pace of older aircraft retirements, which will, in turn, have a positive impact on demand for new aircraft. In addition, although high oil prices will continue to challenge airlines' profitability, the arrival of new, technologically advanced aircraft that deliver direct operating cost reductions will accelerate the retirement of older, less fuel-efficient aircraft, the company said.
The overall forecast adds up to a solid outlook, said Mairead Lavery, vice president, strategy, business development and structured finance for Bombardier Aerospace.
"We have built our leadership position in aviation by continuously pushing the boundaries of product development to better meet the needs of our customers, both those who operate our aircraft and those who use them as a mode of transportation," said Lavery. "We will continue to deliver industry-leading mobility solutions, and we are positioning ourselves for a period of growth by pursuing our international expansion strategy to be closer to our customers in traditional and emerging markets."