Overall revenue expansion since 2007 has been low due to strong growth followed by declines
Los Angeles, CA (PRWEB) January 16, 2013
The Global Commercial Aircraft Manufacturing industry has experienced some turbulence during the past five years. Buoyant demand from developing countries in terms of demand for air travel and replacements in aircraft fleet caused strong revenue growth in the beginning of the period. “This created a strong backlog of orders for major producers, which gave them a beneficial position during the ensuing economic downturn,” says IBISWold industry analyst Josh McBee. The two movements are expected to offset each other and keep revenue relatively flat, with five-year annualized gains of only 0.6% expected by the end of 2012. Besides consumers' limited spending capability, the delayed delivery of the Boeing 787 Dreamliner slowed the industry, which echoed previous delays of rival company Airbus's A380. Meanwhile, demand from newly industrialized countries has grown steadily throughout the period. Trade is estimated to be an important aspect of this industry given that only two manufacturers (France-based Airbus and US-based Boeing) produce large commercial aircraft. Price competition has intensified as well, with oil and steel prices increasingly trending upward in the wake of increasing industrial activity among BRIC nations (Brazil, Russia, India and China).
Over the next five years, the 787 and the Airbus A320neo will drive revenue growth as order numbers increase. In the short term, revenue is expected to grow 2.2% during 2012 and reach an estimated $152.8 billion. Looking ahead, emerging economies in Asia and Latin America will fuel continued increases in export sales and drive geographic expansion on the part of the industry's leading companies. Also, gradually falling unemployment will raise per capita disposable income and increase the ability for consumers to purchase air travel tickets, in turn increasing wear and tear on existing fleets and spurring replacement demand. Last, technological innovations that increase fuel efficiency while maximizing passenger space will also encourage new aircraft purchases. Under these projections, IBISWorld forecasts strong annualized revenue growth during the five years to 2017.
The Global Commercial Aircraft Manufacturing industry is estimated to possess a medium level of market share concentration. US-based Boeing, France-based Airbus, Canadian-based Bombardier and Brazilian aircraft manufacturer Embraer dominate the industry. The first two companies are the only players in the large commercial aircraft market, whereas the latter two are the industry leaders in the regional and business airplanes market. In 2012, the top-two industry players are estimated to account for just over half of all industry revenue. Concentration stems from the historical establishment of strong brands like Airbus, Boeing and Cessna and economies of scale achieved through vertical integration. According to McBee these well-established companies create high barriers to entry that also promote market share concentration. Existing major players will attempt to increase market share through product expansion. For example, Bombardier is entering the large commercial aircraft segment, while Airbus is expanding into long-range business jets. Major players have increased their market share by expanding their product offerings and locating their operations close to their customers. IBISWorld expects the overall number of industry participants to remain relatively flat during the five-year outlook, thereby maintaining the medium level of concentration. For more information, visit IBISWorld’s Global Commercial Aircraft Manufacturing industry report page.
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IBISWorld industry Report Key Topics
The Global Commercial Aircraft Manufacturing industry produces complete civil aircraft, including aerospace engines, propulsion units, auxiliary equipment and parts. Prototypes of aerospace products, aircraft conversions (i.e. major modifications to systems) and complete aircraft or propulsion systems overhaul and rebuilding (i.e. periodic restoration of aircraft to original design specifications) are also included, but military aircraft and ongoing support services are excluded.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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