While both the business aircraft and commercial aircraft markets were affected by the recession, business indicators show improvement and there are positive signs for the global industry in 2010. The Company believes that the market fundamentals are strong in the long term and that there is reason to be cautiously optimistic that demand for new commercial aircraft and business jets will return. It is expected that emerging market opportunities in China, India and other developing regions should provide a powerful impetus to the global industry's recovery. As a leader in commercial and business aviation, Bombardier is confident about the industry's future and continues to invest in new programs, such as the Global Vision flight deck and the Learjet 85, CRJ1000 NextGen and CSeries aircraft.
Business Aircraft Market Forecast
In this year's forecast, Bombardier Aerospace is presenting for the first time a 20-year outlook for the business aircraft industry. The forecast's new time horizon reflects Bombardier's long-term vision of the business jet market and better matches the lifecycle of aircraft programs. In the 20-year period from 2010 to 2029, the Bombardier Business Aircraft Market Forecast predicts there will be a return to growth with business jet manufacturers delivering a total of 26,000 business jets in all segments in which Bombardier competes (from Light to Large categories)(i).
The forecasted 26,000 deliveries over the 20-year period represent total revenues of approximately $661 billion for the industry, of which 10,500 deliveries worth $254 billion are anticipated in the period from 2010 to 2019, and 15,500 deliveries worth $407 billion in the period from 2020 to 2029.
Despite a continued backdrop of global economic challenges, Bombardier believes the long-term market drivers of growth for the business jet industry remain solid. Toward the second half of calendar year 2009, these indicators began showing signs that this market segment was stabilizing. The market drivers include wealth creation, above average economic growth in emerging markets, increased globalization of trade, significant replacement demand potential, new aircraft programs and demand from non-traditional offerings. However, while there are signs of stabilization in the business aircraft industry, historically a lag exists between economic recovery and its positive impact on revenues.
With the fundamentals of the business jet industry expected to remain positive in the long term, Bombardier will maintain its focus on strengthening its market leadership position by continuing to invest in its in-development Learjet 85 aircraft and Global Vision flight deck programs. With a strong product line and dedication to customer support and product development, Bombardier plans to benefit from the expected long-term market growth and to lead the way in the business jet market.
Commercial Aircraft Market Forecast
According to the Bombardier Commercial Aircraft Market Forecast, demand for 20- to 149-seat commercial aircraft is expected to reach 12,800 new aircraft in the 20-year period from 2010 to 2029. This is an increase of 400 units compared to last year's forecast. The forecasted delivery demand is valued at approximately $612 billion(ii).
Demand for new commercial aircraft is directly related to the strength of the global economy, and in this 20-year forecast, the Gross Domestic Product (GDP) growth rate forecast has increased to 3.2 per cent from 2.98 per cent last year.
This year's forecast continues to reflect the shift in demand to larger-capacity commercial aircraft:
With above average economic growth forecasts, developing markets will present sizeable opportunities for new aircraft sales. As such, over the next 20 years, commercial aircraft demand from markets outside of North America and Europe is expected to increase considerably. Illustratively, it is estimated that China's fleet of 20- to 149-seat commercial aircraft will become the third largest, closely behind Europe and the U.S.
Aviation is working together to create an environmentally sustainable industry Within the aviation industry, concern about the impact our products have on the environment is influencing decisions being made at all levels. Building on its strong track record of technological progress and innovation, the aerospace industry has formally committed to a future of carbon-neutral growth by 2020 and increased environmental sustainability.
In the drive to achieve a sustainable future, Bombardier is proactive in addressing environmental concerns. As a leading aircraft manufacturer, Bombardier remains focused on developing and employing technologies that contribute to the industry-wide efforts regarding emissions reduction. Additionally, in its commitment to be a socially responsible corporate citizen, Bombardier is determined to address environmental challenges at all stages of the product lifecycle, from design to end of life. In that regard, Bombardier is the first OEM to earn accreditation from the Aircraft Fleet Recycling Association (AFRA). AFRA is recognized worldwide for its leadership in promoting best practices for salvaging and recycling components from aging aircraft during disassembly.