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Business Aviation Outlook
NBAA 2007
Rob Wilson
President, Business & General Aviation
Honeywell Aerospace
2007 Business Aviation Outlook
• 21st Year of Survey, 16th consecutive public report release
• 1,519 Corporate flight departments from around the world
– Aircraft Manufacturers and other sources
• Purchase plans up significantly, strong international demand
• Record deliveries projected for 2007 and 2008
• Long-term outlook strong
– 14,000 aircraft worth $233B projected from 2007-2017
NBAA 2007
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First Half ‘07 Business Aviation Environment
First Half ‘07 business jet deliveries - 446 aircraft worth $8.3 B
11% increase in units
12% increase in constant 2007 dollars
Over 900 New Jet Orders Reported During First Half 2007:
Most OEMs reporting >50% of orders coming from International clients
Book-to-Bill ratio favorable since 2004, Over 2.0+ since 2005 on higher volume
Industry backlog estimated to be 2.5+ years
Fractional industry net share gain for first half of 2007 +6%
Fractional Segment took 52 new jets in first half, steady over 2006 levels
NetJets Posted $109M pretax profit, 1H revenue up $474m and flight op’s up 15%.
2007 Survey Purchase Plans up 20%
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World Fleet and Operator Base
World Jet Operator Base
World Business Jet Fleet
8,800 Jet Operators
5 Yr. CAGR +4.6%
14,100 Business Jets
5 Yr. CAGR +4.9%
NBAA 2007
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Global GDP Growth Rates
Source: Global Insight
Slow Growth in North America and Western
Europe Offset by Strong Growth in ROW
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Source: Global Insight 9/07
U.S. Real GDP - Global Insight
U.S. GDP Outlook for 2008 ~2% - Some Downside Risk
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Five Year Purchase Plans for New Jets
Fleet Replacement and Expansion Percentage
40%
Additions
Replacements
32.7%
29.7%
30%
23.3%
21.2%
24% 24.1% 24.6%
22.4%
25.6%
25%
22.9%
20%
13.5% 13.6% 13.3%
14.4%
10%
0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Purchase Plans Increased Dramatically, Strongest
Gains in Europe, Asia and Latin America
NBAA 2007
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2007 Purchase Expectations by Region
5 Year Fleet Replacement and Expansion Percentages
100%
78.7%
80%
60%
50.7%
47.4%
38.4%
40%
20.4%
20%
0%
Asia
MiddleEast/Africa
Europe
Latin America North America
Strong Global Demand –
All Regions Except North America Posted Gains
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Survey Five Year Jet Buying Plans by
World Region – Traditional Market Only
Excludes Fractional, Air Taxi
Over One Half of Five Year Demand for New Business
Jets Could Come from Outside the United States
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New Jet Deliveries into Fractional Fleets
160
New Jets Added (Units)
16%
15%
120
20%
13%
15%
11%
9%
80
9-13%
Range
10%
40
5%
52 New Jets Added YTDQ207
Flat over 2006 Level
0
0%
2004
2005
2006
2007
2008
Share of New Business Jet Deliveries
Fractional Ownership & Jet Card Demand
2009-2017
Avg.
Fractional Demand Solid at 100-150 New Aircraft Annually
Share of Total New Jet Sales Lower Due to High Demand
from Traditional Operators and Charter/Air-Taxi Start Up’s
NBAA 2007
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Emerging Region Flight Activity Growth
BA Flight Hours
57
2007-2016 CAGR %
BA hours (M, 10 yrs)
12
6
6
5
12
7
4
3
Asia
Middle East /
Africa
Latin
America
Europe
4
North
America
Strong International Business Aviation Growth –
Rapidly Gaining Momentum Around the World
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General Aviation Jets and Business Liners
Segment Forecasts 2007-2017
10000
20
~8,000-9,000
~$15-16B
~$15B
15
Salesvalue ($B)
Aircraft
7500
5000
10
~$6B
2500
5
~2,100
Overlaps Business
Aviation Outlook
~250
0
0
Small Jets:
Units
Small Jets:
Business Liners: Business Liners:
Value of Deliveries
Units
Value of Deliveries
Incremental $25B+ from 2007 - 2017
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Business Jet Value Index Links Customer
Benefits to Industry Deliveries
GIV
F900
Turbojets
Early TF
Challenger
F50
New TFE
G-V
GEX
900EX
G100
G-200
F-2000
Cit X
Excel
LJ-45
Bravo
CJ2
Premier
Legacy
Hawker 4000
Hawker 900/750
G550
G500
G350
G150
Global 5000
CL300
Learjet 40
Falcon 7X
F2000EX/DX
Sovereign
CJ3/4
XLS
Mustang
Phenom 100/300
HondaJet
Grob Utility Jet
+ Many More
Strong New Product Pipeline Correlates to Industry Sales
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2007 Outlook for Business Jet Deliveries
1600
History
Forecast
1400
Ultra Long
Range
1200
Long Range
Large
Med-Lrg
800
Medium
600
Light-Medium
Light
400
200
Very -Light
0
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
Aircraft
1000
14,000 New Jets from 2007 - 2017
NBAA 2007
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2007 Outlook for Business Jet Deliveries
Constant 2007 Dollars
$25,000
History
Forecast
Ultra Long
Range
$15,000
Long
Range
Large
$10,000
Med-Lrg
Medium
$5,000
Light-Med
Light
17
20
15
20
20
11
20
09
20
07
20
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
13
V-Light
$0
19
Constant $2007 (M)
$20,000
$233B from 2007 - 2017
NBAA 2007
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Conclusions
• 2007 is another record year in the making
– Backlogs and strong order intake should push 2008 deliveries even higher
• Dramatic increase in international demand
– More than compensates for potential U.S. economic slowing
– Near term outlook supported by growth in global buying plans for new jets
• Pipeline of new high value models supports long term growth
• Fractional, jet card and branded charter taking significant
numbers of new aircraft
• Strong international flight activity growth
• Some operator concerns linger
– Sub-prime crisis, stock market volatility, slowing growth in U.S. and outcome of
user fee legislation in U.S.
Strong Outlook – Heading for Record Territory
NBAA 2007
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