A forecast that has proven tougher to make, and certainly less accurate than the weather, is how new airplane sales will go in the future. But that doesn’t stop some companies from trying to see over the edge into the next decade.
The reason airplane engine and airframe manufacturers make forecasts, and rely on those forecasts, is that development of new models takes many years.
We all know that a new airplane requires at least four or five years from concept to first delivery, and many development programs recently have taken much longer. Depending on how you count, even the vaunted Boeing needed an extra three years beyond the proposed schedule to deliver the first 787. And many general aviation airplane development programs have not come much closer to their originally announced schedule.
The situation for new engine makers is even more precarious. An engine takes at least as long as an airplane to engineer, build, and certify. And the engine maker has to bet that the engine will work and spend the millions necessary to develop the engine before the airframe manufacturer can commit to making a new airplane. So it can easily be a decade or more before an engine maker sees the first dollar return on a new engine, though huge amounts of money are flowing out the door for engineering and development.
If the engine and airframe companies call the future wrong – and I don’t mean just next year – the decisions made today could be disasters with no recovery. As pilots we care about the weather a few hours, or even minutes ahead. These guys live or die with forecasts of market demand 10 or more years out.
Honeywell and its engine division that began life as Garrett has been making public at least part of its turbine airplane market forecast for more than 20 years at the annual NBAA convention. Honeywell interviews a large number of business jet operators asking about their airplane purchase plans to develop the forecast.
Honeywell’s forecast methods failed to predict the market crash for airplanes that followed the global financial meltdown in the fall of 2008. That put Honeywell in pretty good company because few saw a recession – or is it depression? – of that magnitude coming.
The peak year for deliveries came in 2008 when almost 1,200 business jets were delivered. This year just more than 600 are expected to fly away from factories. But the Honeywell forecast calls this the bottom year, and next year, 2012, will see a slight uptick or at least leveling of bizjet sales. That’s pretty much a repeat of last year’s forecast, just pushed one year ahead.
The rosy Honeywell forecast for the end of the decade ahead sees more than 1,200 bizjets being delivered in 2021 with a total value of about $30 billion. Almost two thirds of the value will come from large and long-range jets.
Embraer also makes a prediction but it relies on forecasts of global economic conditions rather than interviews with airplane owners about their buying plans. Airplane sales, as you would expect, track very closely with economic conditions.
Predicting how the economy of any country will behave is risky business, but trying to include the whole world, as airplane makers must since aviation is a global business, really tests any forecaster’s tools. But Embraer needs to make plans, and they share the forecast those plans are based on.
Embraer also calls this year the trough with steady growth in bizjet deliveries over the next decade reaching a total of more than 1,400 a year by 2021.
Why should we as pilots and airplane owners care about the future of the jet business? Because bizjets are the financial backbone of general aviation. Selling, flying, and supporting the business jet fleet keeps manufacturers in business, of course, but it also makes it possible for FBOs to be profitable, a parts distribution network to exist, and airports to have the necessary income.
Even piston airplane manufacturers such as Piper, Cirrus, and Diamond are betting future growth on jets. And the turboprop makers Socata, Pilatus, and the others also are part of that turbine world.
No matter what we fly our lives are better when the value of the general aviation fleet is growing. And the forecasts say that it will. I sure do hope the predictions are right.