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The Global Aerospace Industry Situation
The Commercial Aerospace Segment of the Global Aerospace Industry is in the middle of a significant growth phase driven primarily by significant growth in air traffic & cargo traffic globally led by emerging markets along with other strong, long-term growth drivers complemented perfectly by the introduction of new aircraft programs by almost all key industry OEMs.

The air traffic is growing faster than the overall economy. It is estimated that between 2013 to 2032, the demand for aircrafts will reach 35,000. Deloitte Touche Tohmatsu Limited Global Manufacturing Industry group estimates that revenue growth in the 5 percent range is expected for the overall industry in 2014. Also this year will likely bring high single to double-digit levels of growth in the commercial aerospace sub-sector.

The United States represents the largest market worldwide, while Asia-Pacific ranks as the fastest growing market with a CAGR of 8.4% over the analysis period. Growth in the region is led by massive defense spending in China and India.

Industry estimates indicate that the annual increase in the number of large commercial airplanes during the next 20 years will be 3.5 percent per year for a total of 34,000 valued at $4.5 trillion (list prices).

According to the “Mexican Aerospace Industry Strategyc Plan 2012-2020” the value of the global MRO market is expected be 50 billion dollars by 2015 and by 2020 could be 65 billion dollars; on the other hand, Frost & Sullivan estimates that the civil helicopter market will grow from 24,625 in 2009 to 36,946 in 2015.

Mexico is the country with the greatest foreign direct investments (FDI) for aerospace manufacturing operations worldwide.

THE UNITED STATES

In 2012, the U.S. aerospace industry contributed $118.5 billion in export sales to the U.S. economy. The industry’s positive trade balance of $70.5 billion is the largest trade surplus of any manufacturing industry and came from exporting 64.3 percent of all aerospace production.

Among the American strongest aerospace companies Boeing, United Technologies, General Electric, Honeywell and Textron produced approximately 46.6% of all civilian aircraft worldwide.

In 2013 United States exported $ 3, 600 million dollars between helicopters and airplanes, and between 20 and 37 billion dollars are the annual exports value just from the Washington State.

The U.S. aerospace industry directly employs about 500,000 workers in scientific and technical jobs across the nation and supports more than 700,000 jobs in related fields. The states with the highest participation in the aerospace industry are Washington, California, Texas, Kansas and Arizona.


The United States aerospace industry subsectors are:

Large Civil Aircraft (LCA) – The United States is a global leader in LCA production and offers many opportunities for investment in the LCA supply chain.

Rotorcraft – The U.S. rotorcraft industry is diverse with the bulk of new deliveries arriving from mature production lines. The market encompasses military, emergency medical service (EMS) providers, offshore oil and gas exploration, and law enforcement applications.

Commercial Space – The companies in the U.S. commercial space market are major suppliers to U.S. Government programs, where demand has remained stable during the commercial aerospace and global economic downturns.

General Aviation (GA) – The United States is the world’s largest market for GA aircraft. U.S. manufacturers produce a wide range of GA products including piston aircraft, turboprops, jets, balloons, dirigibles, and experimental aircraft.

Engines - Major engine and power plant manufacturers are typically part of diversified corporations producing engines for both civil and military aircraft, either alone or as part of one or more joint ventures. Engines and power plant sales also provide maintenance, repair and overhaul business opportunities.

Unmanned Aircraft Systems (UAS) - Given the rapid growth of military and civil governmental UAS operations, there is tremendous potential for the U.S. industry in the evolving commercial UAS sector. Moreover, the November 2013 release of the FAA’s “Roadmap for Integration of Civil Unmanned Aircraft Systems into the National Airspace” and the interagency-backed “UAS Comprehensive Plan” (along with the release of the Notice of Proposed Rulemaking on Small UAS and the announcement of the six U.S. UAS test sites targeted for 2014) demonstrate the U.S. Government’s commitment to supporting civilian UAS development.

Airport Infrastructure/Aviation Security - Airport infrastructure and aviation security markets continue to grow both in the United States and abroad. At the 38th International Civil Aviation Organization (ICAO) Assembly in the fall of 2013, the Assembly formally endorsed the proposed Aviation System Block Upgrade (ASBU) roadmaps for modernization of the global aviation system. The ICAO ASBUs provide a rational framework for planning of air traffic management upgrades in the future that emphasizes harmonization of technology and procedures. U.S. companies are poised to implement solutions that meet these new requirements.

Along with infrastructure growth, the evolving security needs both within the United States and throughout the world are driving demand for aviation security technologies. The 38th ICAO Assembly also addressed aviation security with the hope of establishing a global baseline. This baseline would include the implementation of risk-based security, the sustainability of security measures, and air cargo and mail security. Similarly, the U.S. Transportation Security Administration has embraced risk-based security as a means of addressing security needs in an efficient and effective manner.

Alternative Aviation Fuels – Demand for alternative fuels in the aviation sector is increasing due to the price volatility of traditional jet fuel, and concerns about the effect of aviation on the environment. The United States is a leader in alternative aviation fuel research and development, and U.S. producers have successfully completed test flights using fuels from a variety of feedstock. These fuel producers are actively seeking investment as they move towards commercial production.

Supply Chain - The United States has a robust aerospace supply chain with capabilities in maintenance, repair, and overhaul (MRO), composites, metal-working, avionics, testing equipment, and coatings. U.S.-based suppliers are highly sought after partners for aerospace manufacturing programs at home and abroad.
Source:Select USASelect USA


THE PACIFIC NORTWEST AEROSPACE ALLIANCE (PNAA) & BOEING

The state of Washington has 72,000 employees in the aerospace industry, 737 product lines of the industry. In the field of Information Technology, 150 companies employ 90,000 workers and reports annual revenues of $ 30 billion dollars. Because of its geographic location, is the third most important state for transport operations in the United States.

Boeing is the largest passenger aircraft and military aircraft manufacturing company. Almost 75% of the world fleet belongs to the Boeing family. Currently exports to over 150 countries.

In 2013, Boeing generated the historic revenue of $ 86.6 billion dollars, which $53 billion, equivalent to 5,080 aircrafts, were in the commercial segment.

In the northwest are located universities with prestigious degrees and doctorates in aerospace specialties such as University of Washington, California Institute of Technology (Caltech), University of California.

CANADA

Being the fifth country with the highest revenues in the aerospace worldwide and the third largest producer of civil aircraft, Canada in the year 2013 reported revenues of 25.18 billion dollars only in the aerospace sector.

Compared with other industries, the Canadian aerospace industry generates 64% more revenue per employee. The government invests more than 5 times in this sector than in other industries because the aerospace sector has a rate of 2.4 times more productivity and its export value is almost double than the exports of other industries.

About 80% of Canadian aerospace production is exported all over the world: 57% is for the United States, 20% to Europe, 13% to Asia, 10% is for Africa, Middle East and Central and South America.

In 2013, Mexico exported to Canada $ 19 million dollars from helicopter parts, and aircrafts.

There are currently 700 aerospace companies established in Canada, employing 172,000 persons just in the aerospace sector. More than 4,500 students per year are graduated from careers in aerospace.

Canada also has many specialized universities in the aerospace industry, as Ryerson University, University of Toronto, York University, McGill University, University of Sherbrooke, Laval University, University of Alberta (U of A). In the city of Montreal, over 4,500 students per year graduate from degrees in aerospace.

Canada currently ranks ninth in terms of GDP. 70% of the total investment in Research and Development from the Canadian Government is destined to the aerospace sector. Only from 2008 to 2013, the budget for this purpose has grown by 40%.

From 2014 to 2021 is expected that the production of civil aircraft in Canada will grow by 22%.

QUEBEC

The region of Quebec is the birthplace of the Canadian aerospace industry. The province reported in 2013 annual sales of $ 21 billion dollars just in this sector.

215 aerospace companies are belonging to Quebec’s region and employ over 43,500 workers. Just considering Montreal city, 1 of 96 workers is employed in the aerospace sector.

Aerospace leaders who are established in the region of Quebec are:

BOMBARDIER: It is the largest manufacturer of civil aviation in the world. World's leading manufacturer of business aircraft, commercial aircraft, amphibious and specialized aircraft and also associated services. Bombardier presents annual revenues of $ 16.8 billion dollars and an increase of 21.7% in net revenues in 2013 (from 470 million dollars to 572 million dollars).

BELL HELICOPTER TEXTRON CANADA: The company began operations in 1986 and has produced more than 4,000 helicopters for different countries. It has facilities in more than 660,000 square feet dedicated to designing, manufacturing and after-sales support of Bell helicopters.

CAE: It is the world’s leader in modeling, simulation and training for civil aviation sectors and defense. The company has approximately 8,000 employees in more than 100 cities located in 30 different countries, of which 3,000 employs are from the city of Montreal. CAE offers training in more than 45 locations worldwide and trains approximately 100,000 annual crew members.

PRATT & WHITNEY CANADA: Producer of new generation engines for regional aircraft, business jets, helicopters and industrial applications. Boost the largest fleet of helicopters and business jets with over 50,000 engines produced for more than 195 countries. Pratt & Whitney employs 9,000 workers, including 6,135 in Canada.

ROLLS-ROYCE CANADA: Since 1947, Rolls-Royce has expanded in the aerospace industry specifically for its aerospace engines and gas turbines for industrial applications. Its plant in Montreal has more than 150,000 square meters. It is a center of excellence in repairing fins blowers, combustion chambers, turbine blades and vanes multiple engines.

Aero Montreal is now the third largest aerospace cluster in the world, this cluster was created in 2006 to enhance the competitiveness of the companies related to the aerospace industry.
Aero Montreal
ONTARIO

The province of Ontario produced approximate revenues of $ 6.4 billion dollars. There are 350 aerospace companies established employing 22,000 professionals, including engineers, technicians and scientist.

It is the second most important region for the Canadian aerospace industry.

This province has created the OAC (Ontario Aerospace Council) which more than 200 companies of the sector are members of it.

Aero Montreal

Unlike Quebec, noted for its aerospace OEMs, aerospace companies in the province of Ontario are focused on systems integrators of structures (Tier 1 and Tier 2), landing gear and flight control, management flight, turbines, MRO, among others.

3% of Canadian GDP is generated by Ontario’s economic activity, who produces also the 45% of total Canadian exports.

EUROPE

Europe has three of the most important countries in the aerospace sector: France, Spain and Germany.

FRANCE

France is the country with the highest sales in the aerospace sector in the European Union. Presents annual exports of more than 20 billion euros, achieving second place worldwide in aerospace exports. Just considering helicopters and airplanes, France in 2013 exported 48 thousand 600 million dollars.

Due to the great importance of this aerospace industry for France, the country has created the French Academy of Air and Space as well as the CORAC national entity (Council for Civil Aeronautics Research) which coordinates the private and public research in the aerospace sector. This national entity has an annual budget of 500 million euros. The budget of ONERA, French Aerospace Laboratory, is estimated at around 200 million euros.

France is co-owner of the largest aerospace companies such as EADS (22.6%), SAFRAN (30.2%), Thales (27%) and Air France / KLM (18.6%).

SPAIN

Spain, the eighth world driver in aerospace industry, reported sales of $ 7 billion euros and annual revenues of more than $ 10 million euros. In 2013 its exports of helicopters and airplanes exceeded 4mil million dollars.

Exports of Aerospace industry and related industries of the Spanish companies have grown by 486% in the last five years.

It is the heart of aerospace associations such as the Association of Spanish Technological Enterprises of Defense, Aeronautics and Space (TEDAE).

It has specialized universities in the aerospace industry as the School of Aeronautical Engineering of the Polytechnic University of Madrid (considered one of the top 100 higher worldwide for aerospace education, according to the QS World University Ranking) Aeronautic Business School ITAérea, the Association of aeronautical Engineers of Spain (COIAE) and the School of Engineering of Seville, who was the first to reach the recognition of excellence in PERSEUS association of European universities in the aeronautical Pegasus and space; and aerospace specialized centers as Center of Technological and Business Center of Aerospace Technology Park of Andalusia, Aerópolis. And of course the Polytechnic University of Madrid (UPM) which is the most valued university of Spain for teaching Mechanical and Aeronautical Engineering.

GERMANY

Germany is a big driver of the aerospace industry, 21% of its national exports are generated by this sector. Reporting annual revenues of over 25 billion euros. Considering helicopters and airplanes, in 2013 Germany exported 34 thousand 700 million dollars.

Exports from the German Aerospace and related industries have grown by 106% over the past 5 years.

From 2007 to 2013 the German government had invested 840 million euros for Aerospace Research and Development. German aerospace companies also invest around 17% of their income on R&D, equivalent approximately to 4.4 billion euros.

Germany has the research center German Aerospace Center (DLR), which has 30 institutes in eight different cities and has an annual budget of 450 million euros, and exclusively for the aerospace industry it invests 760 million euros.

This country is a member of the European Space Agency (ESA), the second largest European aerospace organization.

Germany is also home for 12 aerospace clusters.