Rising fuel prices and increased international travel will encourage airlines to upgrade their fleets with new, fuel-efficient planes.
Los Angeles, CA (PRWEB) August 12, 2013
The Global Commercial Aircraft Manufacturing industry has experienced some turbulence over the past five years. “Emerging economies' buoyant demand for air travel and fleet expansion fueled strong revenue growth in the beginning of the period,” according to IBISWorld industry analyst David Yang. Strong demand helped build a considerable backlog of orders for major players, which helped cushion the drop in demand during the recession. Revenue declined 4.1% in 2009, but new aircraft deliveries and renewed global economic growth have since allowed revenue to recover. After several delays, the Boeing delivered the 787 aircraft in 2011; rival company European Aeronautic Defence and Space Company (EADS) has also experienced strong demand for its A380 and A320neo aircraft. As a result of these trends, IBISWorld expects industry revenue to grow at an annualized rate of 1.7% over the five years to 2013 to total $270.6 billion, including a 2.5% increase in 2013 alone.
Market share concentration for the Global Commercial Aircraft Manufacturing industry has increase moderately over the past five years due to shipments new aircraft from major players Boeing and EADS. “A limited number of new entrants are expected to cause market share concentration to remain stable over the next five years,” says Yang. Boeing and EADS are the only major large passenger aircraft manufacturers in the world, though United Technologies Corporation and General Electric both manufacture engines and parts for industry operators. Boeing and EAS have high market share because of their established brands, the 7-series and Airbus, respectively.
During the past five years, international trade has driven industry growth, as strong demand from emerging economies resulted in heightened trade activity. Commercial aircraft trade is estimated to increase an annualized 2.8% from 2008 to 2013. Industry profitability also moderately increased over the past five years, though this growth was partly due to the recovery from the recession. Furthermore, falling steel and aluminum prices over the period contributed to lower input costs for industry operators. Aircraft manufacturers also benefited from rising oil prices, which bolstered downstream demand for new fuel-efficient aircraft. In particular, the Boeing 747-8, Boeing 787 and the A320neo experienced favorable demand during the past five years because these aircraft incorporate fuel-efficient technology.
In the five years to 2018, airlines in emerging economies will continue to grow strongly, while rising fuel prices will spur purchases of fuel-efficient aircraft. The resulting strong demand for the A320neo, Boeing 787 and Boeing 747-8 aircraft will drive revenue growth. Additionally, rising global income and economic growth will fuel tourism activity. Global tourist travels is anticipated increase an annualized 4.6% in the five years to 2013, and airlines will have to expand their fleet to cater to growing consumer demand. As a result, IBISWorld forecasts that industry revenue will increase moderately in the five years to 2018.
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 and complete aircraft or propulsion systems overhaul and rebuilding are also included. Military aircraft manufacturing and related services are not included in this industry.
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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