Honeywell Business Aviation Outlook NBAA 2006

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Honeywell Business Aviation Outlook NBAA 2006

  1. 1. Business Aviation Outlook NBAA 2006 Rob Wilson President, Business & General Aviation Honeywell Aerospace
  2. 2. 2006 Business Aviation Outlook • 20th Year of Survey, 15th consecutive public report release • 1,400 Corporate flight departments from around the world – Aircraft Manufacturers and other sources • Purchase expectations up, strong international demand • Record deliveries projected for 2006 and 2007 • Long-term outlook strong – 12,000 aircraft worth $195B projected from 2006-2016 NBAA 2006 Honeywell Proprietary
  3. 3. Q206 Business Aviation Environment • First half 2006 business jet deliveries - 403 aircraft worth $7.2B – 26% increase in units – 26% increase in constant 2006 dollars • First half 2006 new jet orders up 6.1% over 2005 levels: – Most OEMs reporting 50% - 75% of orders coming from non U.S. customers – Book-to-Bill ratio running at 1.2 YTD 1H06 on higher volume – Backlogs up, estimated to be between 2,200 - 2,500 aircraft • Fractional Operators took delivery of 53 New jets in the first half 2006 – NetJets Revenue was up 26% and flight op’s up 23% – Net fractional shares declined 11.1% over 2005 levels, jet cards supporting growth • Most Charter Operators Report Booming Business 2006 Survey Purchase Plans up 15% NBAA 2006 Honeywell Proprietary
  4. 4. World Fleet and Operator Base World Business Jet Fleet World Jet Operator Base 13,408 Business Jets 8,440 Jet Operators 5 Yr. CAGR +5.3% 5 Yr. CAGR +4.7% NBAA 2006 Honeywell Proprietary
  5. 5. Five Year Purchase Plans for New Jets 35% Fleet Replacement and Expansion Percentage Additions 29.7% 30% Replacements 25.6% 24% 24.1% 24.6% 25% 25% 23.3% 22.4% 21.4% 20% 14.4% 15% 10% 5% 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Purchase Plans Increased on Strong Demand in Asia, Africa and Middle-East and Improved U.S. NBAA 2006 Honeywell Proprietary
  6. 6. 2006 Purchase Expectations by Region 5 Year Replacement and Expansion Percentages 70.0% 59.7% 60.0% 47.2% 50.0% 40.0% 30.2% 25.3% 30.0% 21.0% 20.0% 10.0% 0.0% Asia Middle Latin America Europe North America East/Africa Growing Demand in Asia, Middle-East and Africa NBAA 2006 Honeywell Proprietary
  7. 7. Survey Five Year Jet Buying Plans by World Region – Traditional Market Only Excludes Fractional Regional New Jet Demand Over the Next 5 Years, Survey Indicates Asia may be the Largest Non U.S. Market Over the Next 5 Years NBAA 2006 Honeywell Proprietary
  8. 8. Reasons for New Jet Purchase – 2006 Survey U.S. Latin America Europe Asia Range Predominates After Age NBAA 2006 Honeywell Proprietary
  9. 9. 2006 Outlook for Business Jet Deliveries 1400 History Forecast 1200 Ultra Long Range 1000 Large Long Range Med-Lrg 800 Aircraft Medium 600 Light-Medium 400 Light 200 Very -Light 0 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 12,000 New Jets from 2006 - 2016 NBAA 2006 Honeywell Proprietary
  10. 10. 2006 Outlook for Business Jet Deliveries Constant 2006 Dollars $20,000 History Forecast $18,000 $16,000 Ultra Long Range $14,000 Constant $2006 (M) Long $12,000 Range $10,000 Large $8,000 Med-Lrg $6,000 Medium $4,000 Light-Med $2,000 Light Very-Light $0 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 $195B from 2006 - 2016 NBAA 2006 Honeywell Proprietary
  11. 11. Conclusions • 2006 is another record year in the making – Backlogs should push 2007 deliveries even higher • Improved buying plans strengthen near term outlook • International demand growing – More than compensates for potential U.S. economic slowing • Pipeline of new high value models supports long term growth • Fractional, jet card and branded charter taking significant numbers of new aircraft • Some operator concerns linger – TFR’s & security regulations, insurance costs and fuel prices Strong Outlook – Meeting or Exceeding Expectations NBAA 2006 Honeywell Proprietary

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