Business & GA

These Avionics OEMs Are Expected to Dominate Biz Av Sales Through 2025

By Woodrow Bellamy III  | October 28, 2016
Send Feedback

[Avionics Magazine 10-28-2016] Honeywell, Rockwell Collins and Garmin are projected to dominate forward-fit sales for business jet cockpit avionics over the next 10 years, according to a new business aviation market forecast released by aircraft brokerage firm Jetcraft. The 10-year forecast positions Honeywell as the dominant player in avionics Original Equipment Manufacturers (OEMs) with a 45 percent revenue market share, followed closely by Rockwell Collins. Garmin comes in, in third place, but will also play an evolving role in cockpit avionics going forward. 
Rockwell Collins’ Pro Line Fusion cockpit on the Citation CJ3. Photo: Rockwell Collins.
Jetcraft’s forecast uses historical unit deliveries for business jet model types as a baseline, and then filters that baseline through a competitiveness index for each specific segment, such as buying preferences. Both segment competitiveness and industry-specific drivers are drawn from Jetcraft’s agnostic experience in the aircraft transaction process. Each segment is tallied and a qualitative process overlaid whereby industry specific drivers are considered to come up with the annual unit delivery and revenue number.
“The forecast looks at forward-fit avionics revenue only. And Honeywell’s predicted revenue market share is almost entirely driven by their concentration in widebody segments. In fact, over 90 percent of the predicted revenue is driven from the provision of flight deck ship-sets in widebody segments, with the Apex flight deck in the PC-24 accounting for the only narrowbody program,” Jetcraft President Chad Anderson told Avionics Magazine. 
Overall, the Jetcraft forecast sees forward-fit sales for avionics OEMs over the next 10 years totaling $15.7 billion. With the breakouts of company market share reflected below:
1. Honeywell — 45 percent, $7.09 billion
2. Rockwell Collins — 37 percent, $5.778 billion 
3. Garmin — 16 percent, $2.543 billion
4. Other — 2 percent, $320 million
Jetcraft also sees Garmin’s relationship with Cessna on the Citation Hemisphere program to be the beginning of a transformation for the company. 
“A few years ago, few thought that Garmin would extend from their narrowbody presence to become a viable integrated flight deck alternative to Honeywell and Rockwell Collins. However, as the industry is disproportionately developing widebody programs, the need for Tier 1 suppliers (engines, avionics, landing gear, systems, etc.) grows. We predict Garmin will develop their operational and capital investment capacity enough to compete for future widebody programs and therefore, continue to be increasingly competitive in these segments,” said Anderson.
Cessna expects the first flight of the Citation Hemisphere to occur in 2019. 
While Honeywell and Rockwell Collins are expected to dominate the market in terms of forward-fit revenues over the next 10 years, both manufacturers reported weakness in their business aviation segments within their recent quarterly earnings reports. The weakness is especially driven by lower demand for aftermarket retrofit avionics equipment. 
Gulfstream’s Symmetry flight deck. Photo: Honeywell Aerospace. 
Honeywell reported an overall 6 percent third quarter decline in aerospace sales from the third quarter 2015 to the third quarter of 2016, “primarily driven by the unfavorable impact of third-quarter OEM incentives, lower volumes in business and general aviation, program completions in the U.S. Space and international defense businesses, and continued weakness in the commercial helicopter business,” the OEM said in its third quarter earnings press release. 
Similarly, within its fourth quarter 2016 fiscal year earnings report, Rockwell Collins reported an 11 percent decline within its commercial systems operating earnings between its fourth quarter earnings in 2015 and 2016. The company attributed the decrease to “lower business aircraft OEM production rates.” Business jet cabin retrofit sales were also down for Rockwell Collins in the fourth quarter. 

“Operating earnings and operating margin decreased due to lower business jet sales, a $4 million charge related to employee headcount reductions, and higher research and development expense and amortization of pre-production engineering costs,” Rockwell Collins noted in its quarterly earnings report.  

Correction: A previous version of this article incorrectly quoted Jetcraft as noting Garmin as the provider of the flight deck of the Cessna Citation Hemisphere. Honeywell Aerospace has been announced as the cockpit avionics supplier for the Hemisphere.

Receive the latest avionics news right to your inbox