Daily Management Review

Covid-19 Has Largely Not Affected Business Jet Purchase Plans, Finds Honeywell Survey


Covid-19 Has Largely Not Affected Business Jet Purchase Plans, Finds Honeywell Survey
The novel coronavirus pandemic which has battered the global economy has largely not been able to affect the plans of new aircraft purchases by business jet operators even though the wider global aviation industry is amongst the worst hit sectors because of the pandemic. This was reported in an outlook on corporate planes published recently by Honeywell Aerospace.
Compared to the commercial aviation industry, the performance has been far better for the private flights industry that cater to the flight demands of smaller groups of wealthy people and promise the rich passengers less risk of exposure to the coronavirus, the report said. Improved demand for their services this summer has been reported by operators such as NetJets and VistaJet.
But whether the rebound in demand in corporate flights during the summer will be a lasting trend and translate into demand for new aircraft is a question that is being closely watched by corporate plane makers such as Canada's Bombardier, United States based General Dynamics Corp's Gulfstream Aerospace and France's Dassault Aviation SA.
"We are seeing corporate customers expressing interest in growing their fleets so they can fly more executives and others privately, to safeguard employees' health and prevent disruptions to their business," said Scott Neal, Gulfstream’s senior vice president of worldwide sales, in an email to the media. .
The Covid-19 pandemic has not been able to dampen the plane buying plans of four out of five respondents who participated in the survey conducted by Honeywell for its 2020 business aviation outlook report in which more than 1,000 existing aircraft operators had participated.
Shantanu Vaish, Honeywell Aerospace's director of strategy and industry marketing however said that the data derived from this closely watched survey do not support the conclusion that the smashing in demand for commercial flights has resulted in an increase in business jet purchases.
It would not be before the middle of the decade that the sector will see deliveries of new aircrafts returning to pre-pandemic levels, the outlook said.
According to an earlier estimate of Bombardier, there will be a 30 per cent drop in 2020 in deliveries of new planes in the industry.
Business jet usage is expected by Honeywell to return to 2019 levels by in the second half of 2021, Vaish said. In comparison, expectations for the global commercial airline industry passenger travel demand returning back to pre-pandemic crisis levels will not happen 2024
A projection of deliveries of 7,300 new business jets worth $235 billion through 2030 was made in the Honeywell outlook's long-range forecast.
Despite this, for both commercial airlines and corporate planemakers and operators, demand for business travel remains a big unknown.
Employees are expected to return to in-person events in 2021, according to an estimate supported by a majority of Global Business Travel Association (GBTA) companies in a recent survey.
The company is seeing a "slow but steady increase" in travel as business recovers, said GE Aviation, a division of General Electric, in an emailed statement to the media.