The global aircraft, engines, parts and equipment industry is expected to reach a value of more than $120 billion by 2015, according to research from Global Industry Analysts. A rising percentage of low-cost, short-haul airplanes deliveries are set to be made to the Asia-Pacific, after the rise of low-cost carriers (LCC) in this region in recent years. Developing countries are expected to provide good opportunities in coming years due to rising demand for military aircraft and increased air traffic, in particular along domestic short-haul routes.
Aircraft manufacturing and production stands to benefit from investments, provided by governments and other parties, in regional aviation infrastructure projects, including new terminal facilities. According to research from Visiongain, the global commercial aircraft parts manufacturer approval industry is expected to grow to $625 million between 2013 and 2023.
Regional Market Share
IBISWorld estimates the US aircraft, engine and parts manufacturing industry to be worth close to $165 billion. The industry encompasses close to 1,500 businesses and employs almost 340,000 people. Airlines are under pressure to renew or expand existing fleets despite climbing fuel prices. The US aircraft, engine and parts manufacturing industry meets this demand by producing products such as fuel-efficient planes. Revenue is expected to show steady growth over the next five-year period. Growth will be fuelled by airlines renewing their fleets and increases in air travel.
Growth will also be fuelled by technology as airlines are keen to invest in improved jets. The industry requires highly-skilled staff to constantly improve existing products and develop new products, keeping up-to-date with technology innovation. Research and development represents a significant area of investment for the industry.
Aside from passenger aircraft, the industry also meets demand from allied forces for military aircraft. Defense spending in the US is expected to decline as the government eases its overseas military involvement. However, commercial demand along with growing very-light jet production is expected to offset this to drive market growth in coming years. Barriers to entry are high in this market, making it a very challenging sector for new entrants.
According to research from IBISWorld, the UK aircraft, engine and parts manufacturing industry ranks second in the world, after the US. This industry benefits from much investment, and research and development. The UK aircraft, engine and parts manufacturing industry has a strong reputation in the design and manufacture of airplane engines as well as in the production and assembly of airplane wings.
On a yearly basis, revenue in the UK aircraft, engine and parts manufacturing industry witnessed 6% growth between 2007 and 2012, and should total almost $37 billion in 2013. Thanks to a backlog of orders, an increase in parts made from composite materials, and a rise in defense spending across the world, industry revenue grew despite the economic recession.
Since leading UK airlines renew their fleets according to fixed timelines, future defense spending on aerospace is known years in advance. Smaller customers tend to order aircraft during healthy economic periods. Due to these factors, the UK aircraft, engine and parts manufacturing industry is forecast to generate revenue of around $3.7 billion before the end of 2013, a significant improvement on the $2.5 billion made in 2010-11. Industry revenue is set to continue growing for the next five-year period, with the Boeing 787 Dreamliner expected to fuel demand, along with the introduction of the A350 program and growing use of prosperous composite materials.
Following the recession, airlines will have to replenish inventories, with restocking in turn fueling airfreight volumes. Emerging economies will play a significant role in fuelling growth in the global aircraft, engines, parts and equipment industry over coming years. According to research from Global Industry Analysts, Asia-Pacific will record the fastest regional growth to reach a yearly rate of almost 4% through 2015.