Company involved in manufacturing aircraft, aircraft parts, missiles, rockets, and/or spacecraft
An
Airbus A321
on
final assembly line
3 in the Airbus plant at
Hamburg Finkenwerder Airport
NASA
's
AIM
(
Aeronomy of Ice in the Mesosphere
)
satellite
, assembled in
clean room
An
aerospace manufacturer
is a
company
or individual involved in the various aspects of
designing
, building, testing, selling, and maintaining
aircraft
,
aircraft parts
,
missiles
,
rockets
, or
spacecraft
.
Aerospace
is a
high technology
industry.
The
aircraft industry
is the
industry
supporting
aviation
by building
aircraft
and manufacturing
aircraft parts
for their
maintenance
. This includes aircraft and parts used for
civil aviation
and
military aviation
. Most production is done pursuant to
type certificates
and
Defense Standards
issued by a government body. This term has been largely subsumed by the more encompassing term: "
aerospace
industry".
Market
[
edit
]
In 2015 the aircraft production was worth US$180.3 billion: 61%
airliners
, 14% business and
general aviation
, 12%
military aircraft
, 10% military
rotary wing
and 3% civil rotary wing; while their
MRO
was worth $135.1 Bn or $315.4 Bn combined.
[1]
The global aerospace industry was worth $838.5 billion in 2017: aircraft & engine
OEMs
represented 28% ($235 Bn), civil & military MRO & upgrades 27% ($226 Bn), aircraft systems & component manufacturing 26% ($218 Bn),
satellites
& space 7% ($59 Bn),
missiles
&
UAVs
5% ($42 Bn) and other activity, including
flight simulators
, defense electronics, public research accounted for 7% ($59 Bn).
[2]
The countries with the largest industry were led by the
United States
with $408.4 Bn (49%), followed by
France
with $69 Bn (8.2%), then
China
with $61.2 Bn (7.3%), the
United Kingdom
with $48.8 Bn (5.8%),
Germany
with $46.2 Bn (5.5%),
Russia
with $27.1 Bn (3.2%),
Canada
with $24 Bn (2.9%),
Japan
with $21 Bn (2.5%),
Spain
with $14 Bn (1.7%) and
India
with $11Bn (1.3%). The top 10 countries represent $731 Bn or 87.2% of the whole industry.
[2]
In 2018, the new commercial aircraft value is projected for $270.4 billion while
business aircraft
will amount for $18 billion and civil helicopters for $4 billion.
[3]
Largest aerospace companies
[
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]
Geography
[
edit
]
In September 2018,
PwC
ranked aerospace manufacturing attractiveness: the most attractive country was the
United States
, with $240 billion in sales in 2017, due to the sheer size of the industry (#1) and educated
workforce
(#1), low
geopolitical
risk (#4, #1 is
Japan
), strong
transportation infrastructure
(#5, #1 is
Hong Kong
), a healthy
economy
(#10, #1 is
China
), but high
costs
(#7, #1 is
Denmark
) and average
tax policy
(#36, #1 is
Qatar
).
Following were
Canada
,
Singapore
,
Switzerland
and
United Kingdom
.
[12]
Within the US, the most attractive was
Washington state
, due to the best Industry (#1), leading Infrastructure (#4,
New Jersey
is #1) and Economy (#4,
Texas
is #1), good labor (#9,
Massachusetts
is #1), average tax policy (#17,
Alaska
is #1) but is costly (#33,
Montana
is #1).
Washington is tied to
Boeing Commercial Airplanes
, earning $10.3 billion, is home to 1,400 aerospace-related businesses, and has the highest aerospace jobs concentration.
Following are Texas,
Georgia
,
Arizona
and
Colorado
.
[12]
In the US, the
Department of Defense
and
NASA
are the two biggest consumers of aerospace technology and products.
[
citation needed
]
The Bureau of Labor Statistics of the United States reported that the aerospace industry employed 444,000 wage and salary jobs in 2004, many of which were in Washington and California,
[
citation needed
]
this marked a steep decline from the peak years during the
Reagan Administration
when total employment exceeded 1,000,000 aerospace industry workers.
[13]
During that period of recovery a special program to restore U.S. competitiveness across all U.S. industries,
Project Socrates
, contributed to employment growth as the U.S. aerospace industry captured 72 percent of world aerospace market. By 1999 U.S. share of the world market fell to 52 percent.
In the
European Union
, aerospace companies such as
Airbus
,
Safran
,
BAE Systems
,
Thales
,
Dassault
,
Saab AB
,
Terma A/S
,
Patria Plc
and
Leonardo
are participants in the global aerospace industry and research effort.
In
Russia
, large aerospace companies like
Oboronprom
and the
United Aircraft Corporation
(encompassing
Mikoyan
,
Sukhoi
,
Ilyushin
,
Tupolev
,
Yakovlev
, and
Irkut
, which includes
Beriev
) are among the major global players in this industry.
Cities
[
edit
]
Important locations of the civil aerospace industry worldwide include
Seattle
,
Wichita, Kansas
,
Dayton, Ohio
and
St. Louis
in the United States (
Boeing
),
Montreal
and
Toronto
in Canada (
Bombardier
,
Pratt & Whitney Canada
),
Toulouse
and
Bordeaux
in France (
Airbus
,
Dassault
,
ATR
),
Seville
in Spain and
Hamburg
in Germany (
Airbus
,
EADS
), the North-West of England and
Bristol
in Britain (
BAE Systems
,
Airbus
and
AgustaWestland
),
Komsomolsk-on-Amur
and
Irkutsk
in Russia (
Sukhoi
,
Beriev
),
Kyiv
and
Kharkiv
in Ukraine (
Antonov
),
Nagoya
in Japan (
Mitsubishi Heavy Industries Aerospace
and
Kawasaki Heavy Industries Aerospace
), as well as
Sao Jose dos Campos
in Brazil where
Embraer
is based.
[
citation needed
]
Consolidation
[
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]
Several consolidations took place in the aerospace and defense industries over the last few decades.
BAE Systems
is the successor company to numerous British aircraft manufacturers which merged throughout the second half of the 20th century. Many of these mergers followed the
1957 Defence White Paper
.
[
citation needed
]
Airbus
prominently illustrated the European airliner manufacturing consolidation in the late 1960s.
[14]
Between 1988 and 2010, more than 5,452
mergers and acquisitions
with a total known-value of US$579 billion were announced worldwide.
[15]
In 1993, then
United States Secretary of Defense
Les Aspin
and his deputy
William J. Perry
held the "Last Supper" at
the Pentagon
with contractors executives who were told that there were twice as many military suppliers as he wanted to see: $55 billion in military?industry mergers took place from 1992 to 1997, leaving mainly
Boeing
,
Lockheed Martin
,
Northrop Grumman
and
Raytheon
.
[16]
Boeing
bought
McDonnell Douglas
for US$13.3 billion in 1996.
[17]
Raytheon
acquired
Hughes Aircraft Company
for $9.5 billion in 1997.
[18]
Marconi Electronic Systems
, a subsidiary of the
General Electric Company plc
, was acquired by
British Aerospace
for US$12.3 billion in 1999 merger,
[19]
to form
BAE Systems
.
In 2002, when
Fairchild Dornier
was
bankrupt
, Airbus, Boeing or Bombardier declined to take the
728JET
/928JET large
regional jet
program as
mainline
and regional aircraft manufacturers were split and Airbus was digesting its ill-fated
Fokker
acquisition a decade earlier.
[14]
On September 4, 2017,
United Technologies
acquired
Rockwell Collins
in cash and stock for $23 billion, $30 billion including Rockwell Collins' net debt, for $500+ million of synergies expected by year four.
[20]
The Oct. 16, 2017 announcement of the
CSeries
partnership between
Airbus
and
Bombardier Aerospace
could trigger a daisy chain of reactions towards a new order.
Airbus gets a new, efficient model at the lower end of the
narrowbody
market which provides the bulk of
airliner
profits and can abandon the slow selling
A319
while Bombardier benefits from the growth in this expanded market even if it holds a smaller residual stake.
Boeing could forge a similar alliance with either
Embraer
with its
E-jet E2
or
Mitsubishi Heavy Industries
and its
MRJ
.
[22]
On 21 December, Boeing and Embraer confirmed to be discussing a potential combination with a transaction subject to Brazilian government regulators, the companies' boards and shareholders approvals.
[23]
The weight of
Airbus and Boeing
could help E2 and CSeries sales but the 100-150 seats market seems slow.
[24]
As the CSeries, renamed A220, and E-jet E2 are more capable than their predecessors, they moved closer to the lower end of the
narrowbodies
.
In 2018, the four Western airframers combined into two within nine months as Boeing acquired 80% of Embraer's airliners for $3.8 billion on July 5.
[14]
On April 3, 2020,
Raytheon
and
United Technologies Corporation
(except
Otis Worldwide
, leaving
Rockwell Collins
and engine maker
Pratt and Whitney
) merged to form
Raytheon Technologies Corporation
, with combined sales of $79 billion in 2019.
[25]
The most prominent unions between 1995 and 2020 include those of Boeing and McDonnell Douglas; the French, German and Spanish parts of EADS; and United Technologies with Rockwell Collins then Raytheon, but many mergers projects did not went through: Textron-Bombardier, EADS-BAE Systems, Hawker Beechcraft-Superior Aviation, GE-Honeywell, BAE Systems-Boeing (or Lockheed Martin), Dassault-Aerospatiale, Safran-Thales, BAE Systems-Rolls-Royce or Lockheed Martin?Northrop Grumman.
[26]
Suppliers
[
edit
]
The largest aerospace suppliers are
United Technologies
with $28.2 billion of revenue, followed by
GE Aviation
with $24.7 billion,
Safran
with $22.5 billion,
Rolls-Royce Holdings
with $16.9 billion,
Honeywell Aerospace
with $15.2 billion and
Rockwell Collins
including
B/E Aerospace
with $8.1 billion.
[27]
Electric aircraft
development could generate large changes for the aerospace suppliers.
[28]
On 26 November 2018, United Technologies announced the completion of its Rockwell Collins acquisition, renaming systems supplier UTC Aerospace Systems as
Collins Aerospace
, for $23 billion of sales in 2017 and 70,000 employees, and $39.0 billion of sales in 2017 combined with engine manufacturer
Pratt & Whitney
.
[29]
Supply chain
[
edit
]
Before the 1980s/1990s, aircraft and aeroengine manufacturers were
vertically integrated
.
Then
Douglas aircraft
outsourced large
aerostructures
and the
Bombardier Global Express
pioneered the "Tier 1"
supply chain
model inspired by
automotive industry
, with 10-12 risk-sharing
limited partners
funding around half of the development costs.
The
Embraer E-Jet
followed in the late 1990s with fewer than 40 primary suppliers.
Tier 1 suppliers were led by
Honeywell
,
Safran
,
Goodrich Corporation
and
Hamilton Sundstrand
.
[30]
In the 2000s, Rolls-Royce reduced its supplier count after bringing in automotive supply chain executives.
On the
Airbus A380
, less than 100 major suppliers outsource 60% of its value, even 80% on the
A350
.
Boeing
embraced an aggressive Tier 1 model for the
787
but with its difficulties began to question why it was earning lower margins than its suppliers while it seemed to take all the risk, ensuing its 2011
Partnering for Success
initiative, as
Airbus
initiated its own
Scope+
initiative for the
A320
.
Tier 1 consolidation also affects engine manufacturers :
GE Aerospace
acquired
Avio
in 2013 and
Rolls-Royce
took control of
ITP Aero
.
[30]
See also
[
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]
References
[
edit
]
- ^
Kevin Michaels (April 28, 2016).
"MRO Industry Outlook"
(PDF)
. ICF International.
- ^
a
b
Richard Aboulafia
; Kevin Michaels (16 July 2018).
"The Global Aerospace Industry Size & Country Rankings"
(PDF)
. The Teal Group / AeroDynamic Advisory.
- ^
Lee Ann Shay (Jan 2, 2018).
"Commercial Spending Will Lead MRO Field In 2018"
.
Aviation Week & Space Technology
. Comparing civil, helicopter, business aviation and military MRO forecasts for 2018.
- ^
a
b
Murdo Morrison (18 August 2023).
"Top 100 aerospace companies ranked by revenue 2022"
.
FlightGlobal
.
- ^
a
b
c
Murdo Morrison (15 September 2020).
"Airbus displaces Boeing as aerospace's biggest company"
.
FlightGlobal
.
- ^
a
b
"Top 100 aerospace companies by revenue 2018"
(PDF)
.
Flight International
. 3 Sep 2019.
- ^
a
b
"Top 100 aerospace companies by revenue 2017"
.
Flight International
. 3 Sep 2018.
- ^
a
b
"Top 100 aerospace companies grow more profitable"
.
Flight International
. 1 September 2017.
- ^
a
b
"Top 100 Special Report"
.
Flight International
. 13 September 2016.
- ^
a
b
"Top 100 Aerospace Companies"
(PDF)
.
Flight International
. 15?21 September 2015.
- ^
"United Technologies and Raytheon Complete Merger of Equals Transaction"
.
www.rtx.com
(Press release). Raytheon Technologies. 3 April 2020
. Retrieved
3 April
2020
.
- ^
a
b
"Aerospace manufacturing attractiveness rankings"
(PDF)
. PwC. September 2018.
- ^
Parker, Dana T.
Building Victory: Aircraft Manufacturing in the Los Angeles Area in World War II,
pp. 131-2, Cypress, CA, 2013.
- ^
a
b
c
Jens Flottau (Jul 12, 2018).
"Aerospace Consolidation Anew: Now It's The Commercial Airframers"
.
Aviation Week & Space Technology
.
- ^
"Mergers & Acquisitions - Aerospace & Defense"
.
Thomson Financial, Institute for Mergers, Acquisitions and Alliances
.
- ^
Leslie Wayne (Feb 27, 1998).
"The Shrinking Military Complex; After the Cold War, the Pentagon Is Just Another Customer"
.
New York Times
.
- ^
"Boeing offering $13 billion to buy McDonnell Douglas"
.
New York Times
. Dec 16, 1996.
- ^
"Raytheon wins bidding war for Hughes Aircraft"
.
Flight International
. 22 January 1997.
- ^
"All-UK merger sends European defence into disarray"
.
Flight International
. 27 January 1999.
- ^
"United Technologies To Acquire Rockwell Collins For $30 Billion"
(Press release). United Technologies. September 4, 2017.
- ^
Michael Bruno (Sep 18, 2017).
"Northrop To Buy Orbital For More Than $9B"
.
Aviation Week & Space Technology
.
- ^
Jerrold T. Lundquist (Oct 18, 2017).
"Opinion: C Series Deal Ends Aerospace Status Quo"
.
Aviation Week & Space Technology
.
- ^
Michael Bruno and Guy Norris (Dec 21, 2017).
"Boeing, Embraer Mull Combination That Could Reset OEM Industry"
.
Aviation Week Network
.
- ^
Jon Hemmerdinger (6 June 2018).
"Mergers may fuel long-awaited E2 and CSeries sales bump"
.
Flightglobal
.
- ^
Jon Hemmerdinger (3 April 2020).
"United Technologies-Raytheon merger to close today"
.
Flightglobal
.
- ^
Murdo Morrison (9 April 2020).
"Failed marriages: Top 10 aerospace mergers that never were"
.
Flightglobal
.
- ^
Thierry Dubois and Jens Flottau (Jan 20, 2017).
"Tier 1 Consolidation Continues As Safran Takes Over Zodiac"
.
Aviation Week & Space Technology
.
- ^
Michael Bruno (Dec 6, 2017).
"Industry Landscape Could Reboot Under Aircraft Electrification"
.
Aviation Week & Space Technology
.
- ^
"United Technologies Announces Intention to Separate Into Three Independent Companies; Completes Acquisition of Rockwell Collins"
(Press release). United Technologies. November 26, 2018.
- ^
a
b
Kevin Michaels (May 18, 2017).
"Beware, OEM-supplier Relations Are Changing"
.
Aviation Week & Space Technology
.
Further reading
[
edit
]
- Hartley, Keith.
The Political Economy Of Aerospace Industries: A Key Driver of Growth and International Competitiveness? (Edward Elgar, 2014); 288 pages; the industry in Britain, continental Europe, and the US with a case study of BAE Systems.
- Newhouse, John.
The Sporty Game: The High-Risk Competitive Business of Making and Selling Commercial Airliners.
New York: Alfred A. Knopf, 1982.
ISBN
978-0-394-51447-5
.
- Wills, Jocelyn.
Tug of War: Surveillance Capitalism, Military Contracting, and the Rise of the Security State
(McGill-Queen's University Press, 2017), scholarly history of
MDA
in Canada.
online book review
External links
[
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]