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The aviation industry is constantly addressing new technical or economic challenges. With rising fuel prices and the need to reduce operating costs, manufacturers are turning naturally more and more to composite materials for all types of aircraft. Exactly how will this affect the evolution of composite production?
(Published on September 2008 – JEC Magazine #43)
Composites are being used more and more on all types of widebodied and commuter aircraft, and more recently on corporate aircraft. We decided that it would be a good idea to review production forecasts for composite materials.
Production on the rise, to the benefit of current players
According to figure 1, total production will peak around 2010 at a constant US$150 billion, and the industry’s global revenues will decrease at a constant rate until 2014, then rise again to reach US$160 billion. This phenomenon and its cyclical nature are due largely to increasing air traffic and to the fact that airlines are gradually replacing their fleets, since most of the composite industry’s aviation business is generated by commercial wide-bodied and commuter aircraft.
Commercial aviation alone is expected to generate orders for 1,300 aircraft worth a total US$90 billion (figure 2).
The United States will account for most aeronautical production, all segments lumped together, with a 4.8% increase in market share from 51.4% to 53.9% by 2017. Europe’s share will also increase from 12.15% to 36.9% during that same time frame. It is important to note, however, that these figures are for revenue from aircraft that are sold under national brand names, so they provide no information on subcontractors. In Asia, Mexico and North Africa, for example, and generally speaking in countries where labour is cheap, there are growing numbers of specialized manufacturing plants, but no major aircraft manufacturers that sell at large scale under a local brand name.
Aside from Embraer, a Brazilian company, the largest manufacturers are American and European ones. The sector’s two heavyweights are Boeing in the United States and EADS in Europe (figure 4).
After a period of consolidation in this market segment, the three largest manufacturers (Bombardier, Embraer and ATR) are holding steady. These should split up an estimated seven billion in constant 2007 US dollars during the period from 2012 to 2017 (figure 5).
There are many more players in the corporate-jet market, because it is highly segmented as a function of the cabin-size/flight radius/price combination. Bombardier Aerospace neatly summed up the market landscape in one of its latest studies (see table 1), which also forecasted a peak in that market in 2010 at 1,100 aircraft per year, worth a total $24.4 billion/year. Production should then drop steadily down to 900 jets per year (for estimated annual $21.7 billion) until 2014-2015, before starting to climb again.
The increasing fuel prices notwithstanding, forecasts for the global aviation market are positive, and there is a backlog of orders. However, we do need to qualify this optimistic outlook:
Even with these challenges, the high characteristics of composites will continue inevitably to drive the market penetration of these materials.
The editorial team would like to thank Richard Aboulafia, vice president, Analysis, Teal Group Corporation, for providing recent market data.
Bombardier Aerospace, Business Aircraft Market Forecast 2007-2016 www.bombardier.com