March 3, 2021
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This Stock Is the Best Way to Invest in Aerospace – The Motley Fool

It’s no secret that the recovery in the aerospace market took a step back over the summer, but that doesn’t mean that there aren’t pockets of relative strength. One such area is the business jet market, and Honeywell‘s (NYSE:HON) latest Global Business Aviation Outlook helps to highlight the case that the stock is the best way to gain exposure to aerospace. Here’s why.

The Global Business Aviation Outlook

The company states that its outlook is created using a combination of macroeconomic analyses, discussions with industry leaders, and, most importantly, “original equipment manufacturers’ production and development plans shared with the company.”

The key takeaways from the outlook imply that the business jet and general aviation market is in a lot better shape than mainstream commercial aviation.

Interior of a business jet

Honeywell’s avionics and auxiliary power units are widely used on business jets. Image source: Getty Images.

Business jet usage

First, business jet usage is expected to be at 80%-85% of 2019 levels in the fourth quarter of 2020 and will be at 2019 levels by the summer of 2021. Contrast this with the International Air Transport Association expectation that commercial air traffic will be down 66% in 2020 compared to 2019, and a full recovery to 2019 levels won’t occur until 2024.

In short, the business jet market is recovering much more quickly than the commercial aviation market in general, and the recession is far less deep in business aviation.

Business jet deliveries