The document summarizes the 2006 business aviation outlook presented by Honeywell Aerospace at the NBAA conference. It finds that purchase expectations and deliveries are up, with record deliveries projected for 2006 and 2007. Over 12,000 new aircraft worth $195 billion are expected to be delivered between 2006-2016. International demand, particularly in Asia, the Middle East, Africa, and Latin America, is growing and compensating for potential slowing in the US. The outlook for the business aviation industry is strong.

1. Business Aviation Outlook
NBAA 2006
Rob Wilson
President, Business & General Aviation
Honeywell Aerospace

2. 2006 Business Aviation Outlook
• 20th Year of Survey, 15th consecutive public report release
• 1,400 Corporate flight departments from around the world
– Aircraft Manufacturers and other sources
• Purchase expectations up, strong international demand
• Record deliveries projected for 2006 and 2007
• Long-term outlook strong
– 12,000 aircraft worth $195B projected from 2006-2016
NBAA 2006 Honeywell Proprietary

3. Q206 Business Aviation Environment
• First half 2006 business jet deliveries - 403 aircraft worth $7.2B
– 26% increase in units
– 26% increase in constant 2006 dollars
• First half 2006 new jet orders up 6.1% over 2005 levels:
– Most OEMs reporting 50% - 75% of orders coming from non U.S. customers
– Book-to-Bill ratio running at 1.2 YTD 1H06 on higher volume
– Backlogs up, estimated to be between 2,200 - 2,500 aircraft
• Fractional Operators took delivery of 53 New jets in the first half
2006
– NetJets Revenue was up 26% and flight op’s up 23%
– Net fractional shares declined 11.1% over 2005 levels, jet cards supporting growth
• Most Charter Operators Report Booming Business
2006 Survey Purchase Plans up 15%
NBAA 2006 Honeywell Proprietary

4. World Fleet and Operator Base
World Business Jet Fleet
World Jet Operator Base
13,408 Business Jets
8,440 Jet Operators
5 Yr. CAGR +5.3%
5 Yr. CAGR +4.7%
NBAA 2006 Honeywell Proprietary

5. Five Year Purchase Plans for New Jets
35%
Fleet Replacement and Expansion Percentage
Additions 29.7%
30% Replacements
25.6%
24% 24.1% 24.6% 25%
25%
23.3% 22.4%
21.4%
20%
14.4%
15%
10%
5%
0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Purchase Plans Increased on Strong Demand in Asia,
Africa and Middle-East and Improved U.S.
NBAA 2006 Honeywell Proprietary

6. 2006 Purchase Expectations by Region
5 Year Replacement and Expansion Percentages
70.0%
59.7%
60.0%
47.2%
50.0%
40.0%
30.2%
25.3%
30.0%
21.0%
20.0%
10.0%
0.0%
Asia Middle Latin America Europe North America
East/Africa
Growing Demand in Asia, Middle-East and Africa
NBAA 2006 Honeywell Proprietary

7. Survey Five Year Jet Buying Plans by
World Region – Traditional Market Only
Excludes Fractional
Regional New Jet Demand Over the Next 5 Years, Survey Indicates
Asia may be the Largest Non U.S. Market Over the Next 5 Years
NBAA 2006 Honeywell Proprietary

8. Reasons for New Jet Purchase – 2006 Survey
U.S.
Latin
America
Europe
Asia
Range Predominates
After Age
NBAA 2006 Honeywell Proprietary

9. 2006 Outlook for Business Jet Deliveries
1400
History Forecast
1200 Ultra Long
Range
1000 Large
Long Range
Med-Lrg
800
Aircraft
Medium
600
Light-Medium
400
Light
200
Very -Light
0
85
87
89
91
93
95
97
99
01
03
05
07
09
11
13
15
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
12,000 New Jets from 2006 - 2016
NBAA 2006 Honeywell Proprietary

10. 2006 Outlook for Business Jet Deliveries
Constant 2006 Dollars
$20,000
History Forecast
$18,000
$16,000 Ultra Long
Range
$14,000
Constant $2006 (M)
Long
$12,000 Range
$10,000
Large
$8,000
Med-Lrg
$6,000
Medium
$4,000
Light-Med
$2,000 Light
Very-Light
$0
85
87
89
91
93
95
97
99
01
03
05
07
09
11
13
15
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
$195B from 2006 - 2016
NBAA 2006 Honeywell Proprietary

11. Conclusions
• 2006 is another record year in the making
– Backlogs should push 2007 deliveries even higher
• Improved buying plans strengthen near term outlook
• International demand growing
– More than compensates for potential U.S. economic slowing
• Pipeline of new high value models supports long term
growth
• Fractional, jet card and branded charter taking significant
numbers of new aircraft
• Some operator concerns linger
– TFR’s & security regulations, insurance costs and fuel prices
Strong Outlook – Meeting or Exceeding Expectations
NBAA 2006 Honeywell Proprietary