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Bombardier Aerospace releases annual market forecasts

Today, Bombardier Aerospace released its annual market forecasts for the business and commercial aircraft markets.

"The financial turbulence being felt around the globe has placed a significant focus on the challenges facing the aviation industry, particularly within the business jet sector. The sharp downturn in global economies in late 2008 precipitated a sharp decline in demand that affected aircraft manufacturers, suppliers and operators. With demand for air travel closely linked to economic growth, we anticipate continued volatility in the aerospace industry in the near term. However, despite the current recession, the market fundamentals are strong in the long term. As the world begins to emerge from this economic crisis, demand should gradually return and future prospects remain solid," said Mairead Lavery, Vice-President, Strategy and Business Development, Bombardier Aerospace.

Business Aircraft Market Forecast

In the 10-year period from 2009 to 2018, the Bombardier Business Aircraft Market Forecast predicts that business jet manufacturers will deliver a total of 11,500 aircraft(i) with revenues of approximately $256 billion US(ii) for the industry.

While in the short term the industry faces such important challenges as high pre-owned inventories, negative public perceptions and a difficult economic climate, Bombardier remains confident that there is a strong potential for the business aircraft industry over the next 10 years. The anticipated return of global economic growth is expected to result in a strong recovery in the demand for business jets.

The worldwide business jet fleet included approximately 13,600 aircraft at the end of 2008. It is expected to grow by a compound annual growth rate (CAGR) of approximately 5.8 per cent over the forecast period to some 23,800 units after aircraft retirements.

The fundamentals of the business jet industry are solid and are expected to remain positive in the long term. Consequently, Bombardier will maintain its focus on strengthening its market leadership position by continuing to invest in its current and future products. With continued growth expected in the medium to long term, the market needs new, innovative aircraft that provide operators with optimized solutions designed to meet their business objectives. An example of Bombardier's ability to constantly pursue innovation and technical advancement is the all new, composite Learjet 85 business jet, scheduled to enter into service in 2013.

Commercial Aircraft Market Forecast

Bombardier Commercial Aircraft Market Forecast has demand for 20- to 149-seat commercial aircraft at 12,400 new aircraft deliveries in the 20-year period from 2009 to 2028. Despite a slight adjustment in demand from last year's forecast, the long term fundamentals within the industry remain positive. The forecasted demand is valued at approximately $589 billion US(ii).

Continued downward yield pressure, projected fuel price increases and environmental concerns will reinforce operators' requirement for modern aircraft with low operating costs. As a result, we anticipate a trend towards the right-sizing of more fuel-efficient aircraft types and a significant number of retirements. Sixty per cent, or 6,900 units, of the current 20- to 149-seat market are expected to be retired over the period of the forecast.

The forecast reflects the shift in demand to the upper end of regional and lower end of the mainline market:

- In the 20- to 59-seat aircraft segment: the forecast predicts deliveries of 300 aircraft;

- In the 60- to 99-seat aircraft segment: deliveries are predicted to reach 5,800 aircraft;

- In the 100- to 149-seat aircraft segment: the forecast predicts deliveries for 6,300 aircraft.

A world leader in the design and production of aircraft with 149 seats and less, Bombardier's commercial aircraft portfolio of products is optimized for the market segments they serve. In service in 12 out of the world's 20 largest airlines, their subsidiaries or affiliated companies(iii), Bombardier's comprehensive portfolio of regional jets and turboprop aircraft include the CRJ700/CRJ900/CRJ1000 NextGen regional jets and Q400 NextGen turboprops. These aircraft meet a wide spectrum of customers needs and are the backbone of many of the world's airlines.

In March 2009, Bombardier announced firm purchase agreements from two customers for its CSeries aircraft program which was launched in July 2008. Set to redefine the 100- to 149- seat category, this new, game-changing family of commercial aircraft will offer operational flexibility, lower operating costs and passenger comfort to mainline carriers, and will be the most environmentally sensitive family of aircraft in its market segment(iiii).

Creating a sustainable future for aviation

The aviation industry has also focused its attention on the important issue of creating sustainable transportation solutions. For its part, Bombardier is being proactive to address environmental concerns. Bombardier's priority is to design the most fuel-efficient aircraft with the lowest noise and emissions in their category, reducing their environmental footprint and meeting its customers' requirements. In addition, as part of its corporate social responsibility initiatives, Bombardier Aerospace was the first original equipment manufacturer (OEM) to offer business aircraft customers a fully managed carbon-offset program.

i) Excluding Very Light jets.

(ii) Values are based on current aircraft list prices in US dollars.

(iii) Source: Air Transport World publication dated January 2009.

(iiii) The CSeries aircraft is in the design phase. All data and specifications are estimates, subject to change in family strategy, branding, capacity, performance during the course of the design, manufacture and certification process. Performance has been estimated based on a 500-nm North American operating environment.

Press release issued by Bombardier Aerospace on June 15, 2009


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