Plane sales likely to lag business aviation pickup

Tue May 4, 2010 1:32pm EDT

* Flight operators still slow to place new orders

* Manufacturers look to 2011-2013 for upturn

* Europe could provide impetus for recovery

By Robert Evans

GENEVA, May 4 (Reuters) - Sales of jet and turboprop planes for the business aviation industry are likely to lag a sharp pickup this year in operated flights because of continuing excess capacity, sector officials said on Tuesday.

The officials and industry analysts attending the annual European Business Aviation Conference and Exhibition EBACE, said manufacturers were looking to the period from 2011 to 2013 for an upturn from the gloom of the past two years.

"There is every reason to believe that demand for business jets will begin to recover 10 to 18 months after a global economic recovery begins," Rob Wilson, president of Honeywell (HON.N) Aerospace Business and General Aviation, told EBACE Convention News.

David Marsh, head of forecasting at the European aviation safety organisation Eurocontrol, told Reuters there was plenty of spare capacity in the global industry's fleet that could be used before new plane orders were placed.

Major manufacturers displaying aircraft at EBACE, the industry's main international showcase, include Airbus Industrie EADS.PA, Boeing (BA.N) Business Jets division, Canada's Bombardier (BBDb.TO) and Brazil's Embraer (EMBR3.SA).

Bombardier, the world's No.3 civil aircraft maker, reported in February that it had delivered 25 percent less business jets in 2009 than in 2008, but warned the weak economy would hold back orders and deliveries this year. [ID:nN05199939]

FLIGHTS ALREADY ON RISE

On Monday, Eurocontrol said that after a sharp decline in business aviation flights across the continent in 2009, largely sparked by the economic recession, they were up 5.2 percent so far this year and 11 percent in March. [ID:nLDE6421F4]

Patrick Dunne of the U.S. National Business Aviation Association (NBAA) said the number of business flights in the United States -- the sector's biggest market -- was 12 percent higher in March than a year earlier.

Business aviation, which ranges from large and luxurious corporate jets through work-horse mid-range aircraft to air taxis and helicopters, accounts for some 8 percent of air traffic movements in Europe, and slightly more in the United States.

From the turn of the century the sector was recording year-on-year growth of some 10 percent, but this came to a halt amid global economic turmoil in 2008 and flights dropped by 14 percent in 2009.

Honeywell, which issued a revised edition of its 2009 market survey Business Aviation Outlook just before the three-day EBACE opened its doors on Tuesday, says Europe -- with a 27 percent share of the global industry -- will lead the revival.

According to the survey, sector operators in Europe have indicated that they plan to start new purchases earlier, perhaps from 2011, than their counterparts in the United States, the major global player in the industry. (Editing by Jonathan Lynn; Editing by Jon Loades-Carter)

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