With 2001 sales of nearly $1 billion, Rolls-Royce announced this week that it remains confident in the long-term strength of the business jet sector over the next 20 years.
Speaking at the National Business Aviation Association (NBAA) 55th Annual Meeting & Convention, Ian Aitken, President – Corporate Aircraft, Rolls- Royce, said: ‘Detailed analysis of the business jet market continues to point toward excellent long-term prospects. Over the next 20 years, we see demand shifting toward medium and larger aircraft powered by engine thrusts of 6,000lb and higher – a market in which we are well positioned. We also expect demand to remain robust in the 2,000lb-thrust category, another strong market for Rolls-Royce.’
Rolls-Royce forecasts that 30,600 engines, valued at $56 billion, will be needed over the next 20 years to meet demand for 14,670 new corporate jet aircraft. This compares to the company’s 2001 forecast in which it was anticipated that nearly 31,000 engines, valued at $52 billion, would be needed to meet demand for 14,330 new corporate jet aircraft.
Although a similar level of engine delivery units is anticipated, the latest view of market structure and model availability is said to show a slightly increased trend toward medium and large twin-engine aircraft, giving an increased engine market valuation.
Aitken re-iterated the company’s previous advice that the market faces a challenging business climate in 2002 and 2003, but that orders for new business jet engines are likely to begin rising toward 2005. The company will produce around 290 AE 3007, BR710 and Tay corporate aircraft engines this year, 7 percent fewer than in 2001.
‘The September 11 terrorist attacks impacted the entire business jet market, and we plan fewer deliveries in 2002 and 2003 than were originally forecast prior to September 11, 2001. We expect that over time, the strong fundamentals of the market will lead to a return to 2001 levels,’ Aitken said.
The core sources stimulating demand for business jets will be replacement of current aircraft, economic growth and wealth creation, and use of business jets to enhance business productivity and personal time-saving. Significant numbers of new users will be brought to the market through fractional ownership, charter businesses, and the development of very light jets.
According to Rolls-Royce, the business jet market has historically been stimulated by the development of new aircraft models. This trend is set to continue, with introduction of new models such as the Rolls-Royce powered Gulfstream V-SP, Bombardier Global 5000, Embraer Legacy and Williams-Rolls powered Raytheon Premier 1.
A replacement market is also beginning to develop. Whereas just 7 percent of business jets ever delivered have been retired from use, 40 percent of the current fleet will be replaced over the next twenty years – generating a replacement market for 4,500 aircraft.
As the tendency in this market is to upgrade to a larger type when changing aircraft, there will be a trend toward larger aircraft in the forecast period. Hence although the medium, long range and very long range sectors account for 24 percent of today’s fleet in service, these three sectors will account for 43 percent of future deliveries.
Aitken said: ‘While the traditional market for business jets continues to dominate deliveries, we expect strong growth of the fractional business, where demand is currently outstripping supply. We also see the Supersonic Business Jet as a possibility within our forecast horizon. We are in discussions with several airframers, and our 30 years of powering supersonic commercial flight gives us unique experience in this sector. As always, though, the business case will dictate progress.’