M&A

29 October, 2009

UPDATE 1-Honeywell says prospects for business jets improving

* Business jet outlook more positive this year

* Hopes to confirm China C919 in 2010

* Prepared to make defence acquisitions (Adds detail)

By Matthias Blamont

PARIS, Oct 29 (Reuters) - Business-jet prospects outside the United States have improved in 2009 despite a tough year for the global economy, Honeywell International's (HON.N) European aerospace chief said on Thursday.

The technology company, which also operates in the automotive and construction sectors, hopes to find out in 2010 whether it has won supply contracts for China's upcoming jumbo jet, the C919, said the executive.

"We offered half a dozen integrated systems for the C919," said Paolo Carmassi, managing director of Honeywell Aerospace Europe, Middle East and Africa. "It is a multi-billion-dollar (sales) opportunity for Honeywell."

Honeywell rivals Thales (TCFP.PA) and Safran (SAF.PA) are also in the running to join the C919 programme, which is China's challenge to the single-aisle Airbus A320 (EAD.PA) and the Boeing 737 (BA.N).

The Commercial Aircraft Corporation of China (COMAC) is expected to announce its supply partners at the end of this year but Carmassi said Honeywell was aiming for 2010.

BUSINESS JET GROWTH

When asked how the business-jet market was faring after a year marked by the economic downturn and a public backlash against corporate perks, Carmassi said sentiment had actually strengthened this year outside of the U.S.

Citing a poll conducted by Honeywell across 1,200 corporate jet operators, Carmassi said 40 percent of those polled outside the U.S. said they would buy a new aircraft in the next five years, versus 32 percent a year earlier.

Carmassi said that Asia, Europe and the Middle East were the most promising markets for corporate jets.

Non-U.S. markets are also where Honeywell wants to develop its defence business.

Carmassi said a dedicated team was looking at growing this side of its business and could make potential acquisitions.

"We have the muscle for that," he said, without specifying how much the company had set aside for acquisitions.

SLOW AIRLINE RECOVERY

Carmassi said the global airline industry would not grow before 2010 or 2011 and that consolidation would still be on the agenda in the next few months in Europe.

Honeywell reported quarterly earnings per share of 80 cents (54 euro cents) on Oct. 23, beating expectations, and targets earnings per share of 2.85 dollars for 2009 and revenues of at least 30 billion. (Writing by Lionel Laurent; Editing by Jon Loades-Carter)

Source: http://www.reuters.com