By John Irish
Revenues in regional aviation business growing by 10% - US aerospace products co.
US Honeywell International said it expected to win contracts worth $500mn in the Middle East in the next 12 months, with revenues in its regional aviation business growing by 10 percent as Middle East airlines put more aircraft into service.Honeywell won contracts worth $500m including from Emirates and Air Arabia at the Dubai Air Show, part of $2.4bn worth of global contracts so far this year, Michael Madsen, vice-president, airlines business segment at Honeywell said.
"I expect at least another $500 million of growth in this region the next year," Madsen said.
Gulf Arab carriers, including Emirates, have placed billion-dollar orders for planes from Boeing and rival European planemaker Airbus, banking on regional economic growth to boost traffic through the hub linking East Asia, Europe and Africa.
Honeywell's Middle East airline's business was in "the neighbourhood of $100 million," Madsen said.
"Our growth rate will be ... at least 10 percent and driven by the acquisition of aircraft that operators are taking right now," Madsen, .. Over the last two years we've seen a very large number of aircraft coming into the region and we're going to see after-market support coming in 2011-2012."
Madsen said he saw the Middle East and China in particular helping offset slowdown in Europe and the United States as their economies see greater growth.
"For airlines to be successful and Honeywell to have success there needs to be two factors: demand for air travel and secondly profitability of the airlines and that's a function of fuel costs and borrowing costs... the access to capital of both of these has been less of an issue in this region than in Europe and US for sure."
The world's biggest maker of cockpit electronics in October held its earnings target for the rest of the year steady, despite topping Wall Street's third-quarter estimates by 8 cents per share. It said it expects to see sales level off next year. (Reuters)