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Aerospace manufacturer

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AnAirbus A321onfinal assembly line3 in the Airbus plant atHamburg Finkenwerder Airport
NASA'sAIM(Aeronomy of Ice in the Mesosphere)satellite,assembled inclean room

Anaerospace manufactureris acompanyor individual involved in the various aspects ofdesigning,building, testing, selling, and maintainingaircraft,aircraft parts,missiles,rockets,orspacecraft.Aerospaceis ahigh technologyindustry.

Theaircraft industryis theindustrysupportingaviationby buildingaircraftand manufacturingaircraft partsfor theirmaintenance.This includes aircraft and parts used forcivil aviationandmilitary aviation.Most production is done pursuant totype certificatesandDefense Standardsissued by a government body. This term has been largely subsumed by the more encompassing term: "aerospaceindustry ".

Market

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In 2015 the aircraft production was worth US$180.3 billion: 61%airliners,14% business andgeneral aviation,12%military aircraft,10% militaryrotary wingand 3% civil rotary wing; while theirMROwas worth $135.1 Bn or $315.4 Bn combined.[1]

The global aerospace industry was worth $838.5 billion in 2017: aircraft & engineOEMsrepresented 28% ($235 Bn), civil & military MRO & upgrades 27% ($226 Bn), aircraft systems & component manufacturing 26% ($218 Bn),satellites& space 7% ($59 Bn),missiles&UAVs5% ($42 Bn) and other activity, includingflight simulators,defense electronics, public research accounted for 7% ($59 Bn).[2] The countries with the largest industry were led by theUnited Stateswith $408.4 Bn (49%), followed byFrancewith $69 Bn (8.2%), thenChinawith $61.2 Bn (7.3%), theUnited Kingdomwith $48.8 Bn (5.8%),Germanywith $46.2 Bn (5.5%),Russiawith $27.1 Bn (3.2%),Canadawith $24 Bn (2.9%),Japanwith $21 Bn (2.5%),Spainwith $14 Bn (1.7%) andIndiawith $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 whilebusiness aircraftwill amount for $18 billion and civil helicopters for $4 billion.[3]

Largest aerospace companies

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By Revenue ($ billion)
Company 2022[4] 2019[5] 2018[6] 2017[7] 2016[8] 2015[9] 2014[10] Country
RTX Corporation 67.1 United States
Airbus[a] 66.6 76.6 101.0 93.4 94.6 96.1 90.8 FranceGermanySpain
Lockheed Martin 66.0 59.8 53.8 51.0 47.2 40.5 45.6 United States
Boeing[a] 61.8 78.9 75.1 72.3 70.8 68.8 80.6 United States
Northrop Grumman 36.6 33.8 30.1 25.8 24.5 23.5 24.0 United States
Rostec 30.0 Russia
BAE Systems 27.0 22.8 12.8 13.4 13.4 13.9 13.7 United Kingdom
GE Aerospace 26.1 30.6 27.4 26.3 24.7 24.0 United States
Safran 20.0 25.2 17.9 16.8 16.6 18.3 France
Rolls-Royce Holdings 17.2 15.0 12.7 12.0 13.2 14.7 United Kingdom
L3Harris 17.1 United States
Leonardo(Finmeccanica) 15.5 14.4 12.5 12.8 13.9 17.2 Italy
United Technologies[b] 46.9 36.0 30.9 29.0 33.1 36.2 United States
Raytheon Company[b] 27.1 25.3 24.1 23.2 22.8 United States
By Operating profit ($ billion)
Company 2022[4] 2019[5] 2018[6] 2017[7] 2016[8] 2015[9] 2014[10] Country
Lockheed Martin 8.35 8.55 7.33 5.90 5.55 4.71 5.59 United States
Airbus[a] 5.60 1.5 5.95 3.70 2.40 4.34 4.50 FranceGermanySpain
RTX Corporation 5.41 United States
GE Aerospace 4.78 6.47 6.64 6.12 5.51 5.00 United States
Northrop Grumman 3.60 3.97 3.78 3.30 3.19 3.08 3.20 United States
Rostec 3.18 Russia
Safran 2.06 3.43 2.58 2.54 1.71 2.74 France
L3Harris 1.27 United States
Leonardo(Finmeccanica) 0.87 0.59 0.90 1.05 0.94 0.72 Italy
Boeing[a] -3.55 -1.98 12.00 10.30 4.90 5.18 7.47 United States
BAE Systems - - - - - - United Kingdom
Rolls-Royce Holdings 0.44 1.11 0.98 1.77 2.15 United Kingdom
United Technologies[b] 5.77 3.57 3.83 3.84 3.00 4.57 United States
Raytheon Company[b] 4.54 3.32 3.24 3.01 3.18 United States
  1. ^abcdIn 2019, Airbus displaced Boeing as the largest aerospace company by revenue due to theBoeing 737 MAX groundings,with $2 billion operating losses down from $12 billion profits the previous year.[5]
  2. ^abcdUnited Technologies merged with theRaytheon Companyin April 2020 to formRaytheon Technologies (RTX Corporation).[11]

Geography

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In September 2018,PwCranked aerospace manufacturing attractiveness: the most attractive country was theUnited States,with $240 billion in sales in 2017, due to the sheer size of the industry (#1) and educatedworkforce(#1), lowgeopoliticalrisk (#4, #1 isJapan), strongtransportation infrastructure(#5, #1 isHong Kong), a healthyeconomy(#10, #1 isChina), but highcosts(#7, #1 isDenmark) and averagetax policy(#36, #1 isQatar). Following wereCanada,Singapore,SwitzerlandandUnited Kingdom.[12]

Within the US, the most attractive wasWashington state,due to the best Industry (#1), leading Infrastructure (#4,New Jerseyis #1) and Economy (#4,Texasis #1), good labor (#9,Massachusettsis #1), average tax policy (#17,Alaskais #1) but is costly (#33,Montanais #1). Washington is tied toBoeing 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,ArizonaandColorado.[12]

In the US, theDepartment of DefenseandNASAare 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 theReagan Administrationwhen 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 theEuropean Union,aerospace companies such asAirbus,Safran,BAE Systems,Thales,Dassault,Saab AB,Terma A/S,Patria PlcandLeonardoare participants in the global aerospace industry and research effort.

InRussia,large aerospace companies likeOboronpromand theUnited Aircraft Corporation(encompassingMikoyan,Sukhoi,Ilyushin,Tupolev,Yakovlev,andIrkut,which includesBeriev) are among the major global players in this industry.

Cities

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Important locations of the civil aerospace industry worldwide includeSeattle,Wichita, Kansas,Dayton, OhioandSt. Louisin the United States (Boeing),MontrealandTorontoin Canada (Bombardier,Pratt & Whitney Canada),ToulouseandBordeauxin France (Airbus,Dassault,ATR),Sevillein Spain andHamburgin Germany (Airbus), the North-West of England andBristolin Britain (AirbusandAgustaWestland),Komsomolsk-on-AmurandIrkutskin Russia (Sukhoi,Beriev),KyivandKharkivin Ukraine (Antonov),Nagoyain Japan (Mitsubishi Heavy Industries AerospaceandKawasaki Heavy Industries Aerospace), as well asSão José dos Camposin Brazil whereEmbraeris based.[citation needed]

Consolidation

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Several consolidations took place in the aerospace and defense industries over the last few decades.

Airbusprominently illustrated the European airliner manufacturing consolidation in the late 1960s.[14]

Between 1988 and 2010, more than 5,452mergers and acquisitionswith a total known-value of US$579 billion were announced worldwide.[15]

In 1993, thenUnited States Secretary of DefenseLes Aspinand his deputyWilliam J. Perryheld the "Last Supper" atthe Pentagonwith 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 mainlyBoeing,Lockheed Martin,Northrop GrummanandRaytheon.[16] BoeingboughtMcDonnell Douglasfor US$13.3 billion in 1996.[17] RaytheonacquiredHughes Aircraft Companyfor $9.5 billion in 1997.[18]

BAE Systemsis the successor company to numerous British aircraft manufacturers which merged throughout the second half of the 20th century. Many of these mergers followed the1957 Defence White Paper.[citation needed]Marconi Electronic Systems,a subsidiary of theGeneral Electric Company plc,was acquired byBritish Aerospacefor US$12.3 billion in 1999 merger,[19]to formBAE Systems.

In 2002, whenFairchild Dornierwasbankrupt,Airbus, Boeing or Bombardier declined to take the728JET/928JET largeregional jetprogram asmainlineand regional aircraft manufacturers were split and Airbus was digesting its ill-fatedFokkeracquisition a decade earlier.[14]

On September 4, 2017,United TechnologiesacquiredRockwell Collinsin cash and stock for $23 billion, $30 billion including Rockwell Collins' net debt, for $500+ million of synergies expected by year four.[20]

Major aerospace and defence deals 2012-2018
Target Buyer Closed U.S. Bn Ref
Precision Castparts Berkshire Hathaway January 2016 37.2
Rockwell Collins United Technologies November 2018 30.0
Goodrich United Technologies July 2012 18.3
Orbital ATK Northrop Grumman June 2018 9.2 [21]
Sikorsky Lockheed Martin November 2015 9.0
B/E Aerospace Rockwell Collins April 2017 8.6
Alliant Techsystems' A&D Group Orbital ATK February 2015 5.0
Exelis Inc. Harris Corp. May 2015 4.75
Avio S.p.A.Aviation Business General Electric August 2013 4.3
Titanium Metals Corp Precision Castparts December 2012 3.0
Firth Rixson Alcoa July 2015 2.85

The Oct. 16, 2017 announcement of theCSeriespartnership betweenAirbusandBombardier Aerospacecould trigger a daisy chain of reactions towards a new order. Airbus gets a new, efficient model at the lower end of thenarrowbodymarket which provides the bulk ofairlinerprofits and can abandon the slow sellingA319while Bombardier benefits from the growth in this expanded market even if it holds a smaller residual stake. Boeing could forge a similar alliance with eitherEmbraerwith itsE-jet E2orMitsubishi Heavy Industriesand itsMRJ.[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 ofAirbus and Boeingcould 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 thenarrowbodies. 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,RaytheonandUnited Technologies Corporation(exceptOtis Worldwide,leavingRockwell Collinsand engine makerPratt and Whitney) merged to formRaytheon 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

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The largest aerospace suppliers areUnited Technologieswith $28.2 billion of revenue, followed byGE Aviationwith $24.7 billion,Safranwith $22.5 billion,Rolls-Royce Holdingswith $16.9 billion,Honeywell Aerospacewith $15.2 billion andRockwell CollinsincludingB/E Aerospacewith $8.1 billion.[27]Electric aircraftdevelopment 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 asCollins Aerospace,for $23 billion of sales in 2017 and 70,000 employees, and $39.0 billion of sales in 2017 combined with engine manufacturerPratt & Whitney.[29]

Supply chain

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Before the 1980s/1990s, aircraft and aeroengine manufacturers werevertically integrated. ThenDouglas aircraftoutsourced largeaerostructuresand theBombardier Global Expresspioneered the "Tier 1"supply chainmodel inspired byautomotive industry,with 10-12 risk-sharinglimited partnersfunding around half of the development costs. TheEmbraer E-Jetfollowed in the late 1990s with fewer than 40 primary suppliers. Tier 1 suppliers were led byHoneywell,Safran,Goodrich CorporationandHamilton Sundstrand.[30]

In the 2000s, Rolls-Royce reduced its supplier count after bringing in automotive supply chain executives. On theAirbus A380,less than 100 major suppliers outsource 60% of its value, even 80% on theA350. Boeingembraced an aggressive Tier 1 model for the787but 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 2011Partnering for Successinitiative, asAirbusinitiated its ownScope+initiative for theA320. Tier 1 consolidation also affects engine manufacturers:GE AerospaceacquiredAvioin 2013 andRolls-Roycetook control ofITP Aero.[30]

See also

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References

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  1. ^Kevin Michaels (April 28, 2016)."MRO Industry Outlook"(PDF).ICF International.
  2. ^abRichard Aboulafia;Kevin Michaels (16 July 2018)."The Global Aerospace Industry Size & Country Rankings"(PDF).The Teal Group / AeroDynamic Advisory.
  3. ^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.
  4. ^abMurdo Morrison (18 August 2023)."Top 100 aerospace companies ranked by revenue 2022".FlightGlobal.
  5. ^abcMurdo Morrison (15 September 2020)."Airbus displaces Boeing as aerospace's biggest company".FlightGlobal.
  6. ^ab"Top 100 aerospace companies by revenue 2018"(PDF).Flight International.3 Sep 2019.
  7. ^ab"Top 100 aerospace companies by revenue 2017".Flight International.3 Sep 2018.
  8. ^ab"Top 100 aerospace companies grow more profitable".Flight International.1 September 2017.
  9. ^ab"Top 100 Special Report".Flight International.13 September 2016.
  10. ^ab"Top 100 Aerospace Companies"(PDF).Flight International.15–21 September 2015.
  11. ^"United Technologies and Raytheon Complete Merger of Equals Transaction".www.rtx.com(Press release). Raytheon Technologies. 3 April 2020.Retrieved3 April2020.
  12. ^ab"Aerospace manufacturing attractiveness rankings"(PDF).PwC. September 2018.
  13. ^Parker, Dana T.Building Victory: Aircraft Manufacturing in the Los Angeles Area in World War II,pp. 131-2, Cypress, CA, 2013.
  14. ^abcJens Flottau (Jul 12, 2018)."Aerospace Consolidation Anew: Now It's The Commercial Airframers".Aviation Week & Space Technology.
  15. ^"Mergers & Acquisitions - Aerospace & Defense".Thomson Financial, Institute for Mergers, Acquisitions and Alliances.
  16. ^Leslie Wayne (Feb 27, 1998)."The Shrinking Military Complex; After the Cold War, the Pentagon Is Just Another Customer".New York Times.
  17. ^"Boeing offering $13 billion to buy McDonnell Douglas".New York Times.Dec 16, 1996.
  18. ^"Raytheon wins bidding war for Hughes Aircraft".Flight International.22 January 1997.
  19. ^"All-UK merger sends European defence into disarray".Flight International.27 January 1999.
  20. ^"United Technologies To Acquire Rockwell Collins For $30 Billion"(Press release). United Technologies. September 4, 2017.
  21. ^Michael Bruno (Sep 18, 2017)."Northrop To Buy Orbital For More Than $9B".Aviation Week & Space Technology.
  22. ^Jerrold T. Lundquist (Oct 18, 2017)."Opinion: C Series Deal Ends Aerospace Status Quo".Aviation Week & Space Technology.
  23. ^Michael Bruno and Guy Norris (Dec 21, 2017)."Boeing, Embraer Mull Combination That Could Reset OEM Industry".Aviation Week Network.
  24. ^Jon Hemmerdinger (6 June 2018)."Mergers may fuel long-awaited E2 and CSeries sales bump".Flightglobal.
  25. ^Jon Hemmerdinger (3 April 2020)."United Technologies-Raytheon merger to close today".Flightglobal.
  26. ^Murdo Morrison (9 April 2020)."Failed marriages: Top 10 aerospace mergers that never were".Flightglobal.
  27. ^Thierry Dubois and Jens Flottau (Jan 20, 2017)."Tier 1 Consolidation Continues As Safran Takes Over Zodiac".Aviation Week & Space Technology.
  28. ^Michael Bruno (Dec 6, 2017)."Industry Landscape Could Reboot Under Aircraft Electrification".Aviation Week & Space Technology.
  29. ^"United Technologies Announces Intention to Separate Into Three Independent Companies; Completes Acquisition of Rockwell Collins"(Press release). United Technologies. November 26, 2018.
  30. ^abKevin Michaels (May 18, 2017)."Beware, OEM-supplier Relations Are Changing".Aviation Week & Space Technology.

Further reading

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  • 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.ISBN978-0-394-51447-5.
  • Wills, Jocelyn.Tug of War: Surveillance Capitalism, Military Contracting, and the Rise of the Security State(McGill-Queen's University Press, 2017), scholarly history ofMDAin Canada.online book review
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