By Allison Lampert
MONTREAL (Reuters) - Business jet operators planning new aircraft purchases are largely undeterred by the battering delivered by the COVID-19 pandemic to the aviation sector, according to a Honeywell (N:HON) Aerospace outlook on corporate planes published on Tuesday.
Private flights, which carry smaller groups and promise wealthy passengers less risk of exposure to the coronavirus, have generally fared better than those of commercial airlines, with operators like NetJets and VistaJet reporting improved demand this summer.
Still, many forecasters remain cautious about the business jet market with deliveries expected to decline by 25% to 30% in 2020 due to the pandemic. The industry, which delivered 809 business jets in 2019, has still not recovered since its peak of 1,317 deliveries in 2008, analyst Brian Foley said.
Honeywell's 2020 business aviation outlook said new aircraft deliveries would only return to pre-pandemic levels by the middle of the decade.
Corporate planemakers like Canada's Bombardier Inc (TO:BBDb), U.S.-based General Dynamics Corp's (N:GD) Gulfstream Aerospace and France's Dassault Aviation SA (PA:AVMD) are closely watching to see if a summer rebound in corporate flights will last and generate demand for new aircraft.
"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," Scott Neal, Gulfstream’s senior vice president of worldwide sales, said by email.
The outlook, which surveyed more than 1,000 existing aircraft operators, found four out of five respondents said their buying plans have not been affected by COVID-19.
Honeywell, a supplier to the aviation industry, expects business jet usage to recover to 2019 levels by the second half of 2021.
Still, results from the closely watched survey do not support the hypothesis that a decline in commercial travel has led to an increase in business jet purchases, said Shantanu Vaish, Honeywell Aerospace's director of strategy and industry marketing.
Global airlines believe it would take until 2024 for passenger traffic to return to pre-crisis levels.
Boeing Co (N:BA) on Tuesday forecast 43,110 commercial aircraft deliveries over the next 20 years, down 2% from 44,040 projected a year ago.
The Honeywell outlook's long-range forecast through 2030 projects 7,300 new business jet deliveries worth $235 billion, down 4% from the same 10-year forecast a year ago.
Still, demand for business travel remains unknown for both commercial airlines and corporate planemakers and operators.
In a recent survey, a majority of Global Business Travel Association (GBTA) companies said they expect their employees to return to in-person events in 2021.
Companies interviewed by Reuters said their employees are traveling far less and usually with airlines.
CAE (TO:CAE), the world's largest civil aviation training company, said its employees fly commercial but only for limited essential travel.
GE Aviation, a division of General Electric Co (N:GE), said the company is seeing a slow but steady increase in travel.
GE Aviation employees fly on the company's two Honda jet business aircraft, mostly when commercial flights are not readily available. But most travel continues to be on commercial airlines.