Business jet purchase plans mostly unscathed by COVID-19, Honeywell survey shows

MONTREAL (Reuters) – Business jet operators planning new aircraft purchases are largely undeterred by the battering the COVID-19 pandemic has done to the aviation sector, a Honeywell (N:HON) Aerospace outlook on corporate planes published on Tuesday says.

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.

Corporate planemakers like Canada’s Bombardier (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 the summer rebound in corporate flights will last and translate into 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,” said Scott Neal, Gulfstream’s senior vice president of worldwide sales, by email.

According to Honeywell’s 2020 business aviation outlook, which surveyed more than 1,000 existing aircraft operators, four out of five respondents said their buying plans have not been affected by COVID-19.

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.

The outlook said new aircraft deliveries would only return to pre-pandemic levels by the middle of the decade.

Bombardier has said it expects industry-wide deliveries to drop 30% in 2020.

Vaish said Honeywell expects business jet usage to recover to 2019 levels by the second half of 2021.

By comparison, global airlines believe it would take until 2024 for passenger traffic to return to pre-crisis levels.

The Honeywell outlook’s long-range forecast through 2030 projects 7,300 new business jet deliveries worth $235 billion.

Still, demand for business travel remains a big 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.

GE Aviation, a division of General Electric (N:GE), said in an emailed statement the company is seeing a “slow but steady increase” in travel as business recovers.

GE Aviation employees fly on the company’s two Honda jet business aircraft, “mostly when commercial flights aren’t readily available,” but the bulk of their travel continues to be on commercial airlines.