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NEW YORK (Reuters) - Sales of business jets are expected reach $18.4 billion this year, up about 8 percent from last year, a sign of further economic strengthening despite some pockets of weakness notably in Asia, according to a forecast by Honeywell Aerospace (HON.N).
The forecast expects continued recovery from the economic low of 2009, and for growing demand for bigger jets with longer range, including those made by Bombardier Inc (BBDb.TO) and Gulfstream, a unit of General Dynamics Corp (GD.N).
The higher cost of the bigger jets will keep overall spending moving higher even as actual number of jets sold is expected to be down about 1 percent compared with last year because of problems in the supply chain that hampered manufacturing, Honeywell said.
The survey forecast up to 9,250 new business jets will be delivered through 2023, worth more than $250 billion.
The number of jets expected to be purchased in Asia in the next five years fell in the latest survey from a year ago. Also, the Asian share of global demand over the next five years should drop to 5 percent from 7 percent, according to the survey, which tallies purchase expectations from more than 1,500 business jet operators around the world.
Asian buyers are expected to buy jets equivalent to 24 percent of their fleet in the next five years, down from an expected 34 percent in last year's survey.
"Purchase expectation in China held strong," said Rob Wilson, president of Honeywell's business and general aviation division. "It was the Asia component around China that dropped," including relatively slow growth in India.
The share of global demand in Latin America held steady at 18 percent the survey said, showing continued economic strength. Jet buyers are expected to replace or add to the equivalent of 39 percent of their fleets over the next five years, also unchanged. However most of those purchase were expected in the next three years, in part because of older fleets in the region, especially in Brazil.
The share of global jet purchases in North America jumped to 61 percent in the latest survey from 53 percent a year ago, partly because of economic recovery and also reflecting weakness in Asia and Europe. The fleet turnover expectation rose to 28 percent over five years, compared with 25 percent previously.
Europe's share of global demand fell to 12 percent from 18 percent, the survey found, reflecting a "fairly long period of weak growth," Wilson said. "That may improve."
European purchase expectations declined to 25 percent, well below the 30 to 33 percent figure reported in the past three years.
The European responses to the latest survey may be skewed, Wilson noted, because there were only minimal survey response from operators in Russia, which is typically a strong market.
Reporting by Alwyn Scott; Editing by Bob Burgdorfer