Bombardier’s Annual Aircraft Market Forecasts

Bombardier Aerospace this week released its annual aircraft market forecasts for the business and commercial aircraft markets.

While both business and commercial aircraft were affected by the recession, business aircraft industry indicators are trending upwards, and the commercial aircraft market is seeing the beginning of a market recovery. China, India and other developing regions are leading the global industry recovery and are expected to capture an increasingly important share of industry orders in both the business and commercial aircraft markets.

“In 2011, we mark our 25th anniversary in the aerospace industry, and innovation has been a key driver of our successes during the last quarter century,” said Guy C. Hachey, President and Chief Operating Officer, Bombardier Aerospace. “We are confident in our future, and as the market continues to recover, we are building on our strong commitment to innovation and reinforcing our leadership position in commercial and business aviation.”

Mairead Lavery, Vice President, Strategy, Business Development and Structured Finance, Bombardier Aerospace, added, “Maintaining our focus on new product development, such as the Learjet 85 and CSeries aircraft, the Global Vision flight deck, and the recently launched Global 7000 and Global 8000 business jets, and successfully delivering products that meet the needs of our customers, such as the CRJ1000 NextGen aircraft, will help us emerge from the recession at the forefront of our industry.”

Business Aircraft Market Forecast

For the 20-year period from 2011 to 2030, the Bombardier Business Aircraft Market Forecast predicts a return to sustained growth in business aviation, with business jet manufacturers delivering a total of 24,000 business jets in all segments in which Bombardier competes, representing total revenues of approximately $626 billion for the industry.

For the 10-year period spanning 2011 to 2020, 10,000 deliveries worth $260 billion are anticipated, and 14,000 deliveries worth $366 billion are anticipated in the 10-year period from 2021 to 2030.

The business aircraft industry’s improving book-to-bill ratio is a positive signal that the market has turned the corner and is gaining momentum. While industry deliveries are not expected to improve significantly in 2011, key indicators are showing an upward trend, and it is expected that business aircraft deliveries will continue to grow in 2012. In addition, with a widening customer base for business aircraft – especially in high-growth economies – Bombardier anticipates that North America, Europe and China will be the three most active markets going forward and will generate the most revenues over the next 20 years.

Commercial Aircraft Market Forecast

According to the Bombardier Commercial Aircraft Market Forecast, demand for 20 to 149-seat commercial aircraft is expected to result in 13,100 new aircraft deliveries during the 20-year period from 2011 to 2030. This is an increase of 300 units compared to last year’s forecast. The forecasted delivery demand is valued at approximately $639 billion.

Worldwide interest in new generation technology with improved operating efficiencies, passenger comfort and a reduced environmental impact, paired with expected economic growth in developing markets, will drive the demand for new commercial aircraft.

As air travel demand is linked to economic growth, signs that a global recovery is underway are reflected in strengthened demand for new commercial aircraft in both developed and emerging markets. In this 20-year forecast, the world's Gross Domestic Product (GDP) is anticipated to grow at an average of 3.4% per year, up 0.2 points from last year’s average of 3.2%.

In developing markets, economic growth forecasts are well above the worldwide average, presenting sizeable opportunities for new aircraft sales. It is anticipated that over the next 20 years, commercial aircraft demand from markets outside of North America and Europe will increase considerably. Illustratively, it is forecast that China’s fleet of 20 to 149-seat commercial aircraft will become the third largest, closely behind Europe and the U.S..

An area of concern in the industry continues to be the rising cost and volatility of oil prices, which creates uncertainty in the planning activities of many airlines. Combined with the political changes taking place in many of the oil producing countries, and recent climatic events such as the earthquake and tsunami in Japan, the global demand for air travel has slowed in the short term. However, in the long term, the price of oil will drive airlines to accelerate the retirement of older, less efficient aircraft, increasing the demand for new-technology, more fuel-efficient aircraft.

Operators’ shift toward modern aircraft with low operating costs will also be driven by continuing yield pressures and a global focus on environmental sustainability.

Bombardier’s 20-year forecast continues to reflect the trend toward larger-capacity commercial aircraft. Bombardier’s forecasted deliveries by segment are as follows:

20 to 59 seats: 300 new aircraft, valued at $6.5 billion;
60 to 99 seats: 5,800 new aircraft, valued at $208.6 billion;
100 to 149 seats: 7,000 new aircraft, valued at $423.7 billion.

Additionally, more than half of the current commercial aircraft fleet will be replaced over the next 20 years due to technical obsolescence, with the largest number of these replacements being in the 100- to 149-seat category.

Delivery of three distinct commercial aircraft families will continue to be the foundation of Bombardier’s strategic plan. The Q400 NextGen turbroprop and CRJ NextGen aircraft family will serve the regional airline market, while the CSeries aircraft family will serve the mainline and low-cost carrier market segments. All three aircraft families feature a reduced environmental footprint, low operating costs, passenger comfort and significant operational flexibility, the sum of which provides significant value to Bombardier’s customers.

As Bombardier continues to implement its worldwide customer support expansion strategy, it recently announced a major ramp-up of its aftermarket services in China with the establishment of a new Regional Support Office and parts depot in Hong Kong, a new Line Maintenance Facility in Jinan, and a new Director of Business Development based in Beijing. The company also recently boosted its service network in Latin America.

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