Bombardier's Latest Business and Commercial Aircraft Market Forecasts

While the world economy has grown at a slower than expected rate, signs of improvement in the business and commercial aircraft markets have started to emerge.

Business indicators are pointing towards a gradual industry recovery and new aircraft orders are supported by continued demand from established markets - such as North America and Europe - and growth potential in emerging markets, which are forecast to play an increasing role in the global aviation marketplace.

China is expected to be the second largest region in terms of commercial aircraft deliveries in the 20 to 149-seat segment, and the third for business aircraft over the next 20 years. Also, as environmental concerns continue to gain importance and high fuel prices add pressure to the bottom line, operators across both industries will remain focused on finding more efficient and sustainable solutions.

"At Bombardier, we have a long and proud tradition of pushing the boundaries of technology, and developing the next generation of aircraft that will better meet the needs of our customers - both today, and tomorrow," said Michael McAdoo, Vice President, Strategy and International Development, Bombardier Aerospace. "As such, Bombardier Aerospace with its new category-defining business and commercial programs is well-positioned to strengthen its leadership position in its current markets."

Business Aircraft Market Forecast

Bombardier forecasts a total of 22,000 business jet deliveries from 2014 to 2033 in the segments in which Bombardier competes representing approximately US$617 billion in industry revenues.

Bombardier's Business Aircraft Market Forecast anticipates 9,200 aircraft deliveries, worth US$264 billion between 2014 and 2023, and 12,800 aircraft, worth US$353 billion, from 2024 to 2033.

The market for business aviation continues to show promising signs of recovery. While current macroeconomic indicators are mixed, the overall trend for the world economy is stable to positive. In 2014, the world GDP is expected to grow by 2.9%, with higher growth expected in 2015 onward. Industry order intake saw incremental improvement in 2013 over 2012, allowing the industry to record a book-to-bill ratio of one for the second year in a row. Industry deliveries are expected to increase slightly in 2014 from 2013 based on the delivery guidance of manufacturers and new aircraft programs.

Business aircraft orders are expected to remain challenging in 2014 across the industry, but projected to improve beginning in 2015. It is also anticipated that with demand for business jets shifting towards emerging markets, the fleet of large and medium category aircraft will grow, with the large aircraft category demonstrating the fastest growth.

Over the forecast period, Bombardier predicts North America will receive the greatest number of new business jet deliveries between 2014 and 2033, followed by Europe, which remains the second largest market. China is forecast to become the third largest region in terms of deliveries over the next 20 years with 950 deliveries from 2014 to 2023, and 1,275 deliveries from 2024 to 2033.

Bombardier predicts that - similar to commercial aviation - future challenges facing the business aviation sector include rising fuel prices and increased environmental awareness. To face these challenges, Bombardier continues to invest in innovative, more efficient transportation solutions through its new aircraft development programs that include the Global 7000, Global 8000 and Learjet 85 aircraft.

Commercial Aircraft Market Forecast

The commercial aviation market is profitable and growing, and the industry continues to evolve to manage growth, high fuel prices and increased competition. Over the next 20 years, Bombardier forecasts demand for 13,100 aircraft deliveries in the 20- to 149-seat seat segment valued at $658 billion US.

Bombardier forecasts the following industry deliveries by segment:

- 20-to 59-seats: 400 aircraft deliveries
- 60- to 99-seats: 5,600 aircraft deliveries
- 100- to 149-seats: 7,100 aircraft deliveries

In the 20 to 59-seat segment, Bombardier anticipates that new aircraft deliveries will continue at a modest pace for the duration of the forecast period as old aircraft are retired and replaced with larger types. The 60 to 99-seat segment will continue to be one of the most dynamic in commercial aviation. It is anticipated that the fleet in this segment will more than double in size with new aircraft deliveries evenly split between large turboprops and large regional jets. The 100 to 149-seat aircraft segment, which has not been the focus of aircraft development for at least the past two decades, will witness a major fleet transformation with the entry-into-service of new clean-sheet aircraft designs.

The global demand for air travel and new aircraft continues to shift towards emerging markets where demand for air travel continues to grow with increasing GDP and an expanding middle class. However, as with the business aircraft industry, North America is expected to lead the way in commercial aircraft deliveries over the forecast period, taking in an expected 3,650 new aircraft, followed by Greater China with 2,280 aircraft, Europe with 1,840, the Asia Pacific with 1,400, Latin America with 1,100 aircraft, the Commonwealth of Independent States (CIS) with 830, India with 760, Africa with 700, and the Middle East with 540.

Aircraft in the 20 to 149-seat segment have a vital role to play in the development of new markets, non-stop connections and increased frequencies; 70% of the world's short to medium-haul markets serve between 50 and 250 passengers per day each way (PDEW), and are best served by 20 to 149-seat aircraft.