Aircraft Engine & Parts Mfrs

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,030 aircraft engine and parts manufacturers in the US produce civilian and military aircraft engines, engine parts and accessories, other aircraft parts and subassemblies, and auxiliary equipment for aircraft. They may also provide design and development services for new engines and parts, as well as support and repair services for existing products.

Government Regulations and Policies

The aircraft industry is highly regulated by the Federal Aviation Administration in the United States, and equivalent regulatory agencies in other countries.

Availability of Raw Materials

Many expensive and sometimes rare specialty metals are used in the manufacture of aircraft engines and parts.

Industry size & Structure

The average aircraft engine and parts manufacturer employs 184 workers and generates $74-75 million in annual revenue.

    • The industry includes about 1,030 firms, generating about $77 billion in annual sales and employing 190,600 workers.
    • The aircraft engine and parts industry is a high technology-driven manufacturing business, characterized by a few large engine and aircraft manufacturers working in close collaboration with many smaller, highly specialized engine subassembly and parts manufacturers.
    • About 79% of the industry's establishments have 100 or fewer employees, yet the largest manufacturers employ over 80% of the total industry workforce.
    • The largest engine manufacturers, in order of worldwide market share, are GE Aviation, Rolls-Royce, and Pratt-Whitney.
    • Most engine and aircraft parts manufacturers sell to civilian, commercial and defense aircraft manufacturers, but usually the end-user customer, such as a commercial airline, dictates which competitive engine and subsystems will be installed in their aircraft.
    • The 5 largest commercial aircraft manufacturing customers are Boeing, Airbus, Bombardier, Embraer, and Tupolev. The 5 largest general aviation manufacturing customers are Cessna, Cirrus Aircraft, Diamond Aircraft, Mooney and Piper.
    • The largest numbers of industry-related manufacturers are in California, Connecticut, Florida, Texas, Ohio, Michigan, and Arizona.
                                  Industry Forecast
                                  Aircraft Engine & Parts Mfrs Industry Growth

                                  Coronavirus Update

                                  Nov 1, 2021 - Commercial Air Traffic Recovery Boosts Revenue
                                  • Revenue at jet engine maker Pratt & Whitney increased 25% year over year in Q3 2021. Company officials cited a recovery in commercial air traffic as the primary cause. The increase in sales was driven by a 56% increase in maintenance and repair of commercial jet engines, a 22% rise in equipment manufacturing, and a 2% increase in military sales. Greg Hayes, Chief Executive Officer of parent company Raytheon Technologies, told investor analysts on a conference call that North Atlantic air routes are beginning to reopen, but Asian routes are not expected to fully restart until 2023. A full recovery, or restoration of revenue to 2019 levels, is not expected at Raytheon’s Collins Aerospace until 2023, he said.
                                  • The Biden administration is making $482 million available to aviation industry manufacturers to help them avert job or pay cuts due to the coronavirus pandemic. The delta variant has led to elevated cancellations and diminished travel in recent months. More than 100,000 aerospace jobs have been lost in an industry that had employed about 2.2 million people, according to the US Department of Transportation (DoT). The taxpayer-funded relief will cover up to half of the payroll costs at 313 companies and will help save up to 22,500 jobs, according to the DoT.
                                  • European aerospace giant Airbus is urging suppliers to begin planning investments in new machinery and staff right away to ensure that parts are available when the coronavirus pandemic ends. Preparations need to start now due to the industry’s long lead times, company officials say. Single-aisle planes typically used for domestic or regional flights is where traffic is expected to rebound earliest. The market for civilian aircraft in this segment could return to pre-pandemic levels as early as 2023, according to Airbus.
                                  • GE officials said that it will probably take two or three years for aircraft engine maintenance volumes to return to pre-pandemic levels, supporting a recovery in GE Aviation's revenue and earnings.
                                  • United Airlines announced on June 30 a massive new order for 200 Boeing 737 MAX and 70 Airbus A321neo aircraft. Analysts say that the big order is intended to revamp United’s single-aisle jet fleet and position the airline to grow with the expected surge in air travel as the COVID-19 pandemic downturn ends.
                                  • GE Aviation expects maintenance shop visits, a driver of demand for parts, to be flat in 2021 compared with the prior year’s depressed level. Revenue from maintenance and repair work was down 43% in Raytheon Technologies' Collins Aerospace parts division and 35% in the Pratt & Whitney engine unit in early 2021. Boeing CEO David Calhoun called 2021 and the vaccine distribution a “key inflection point” but also warned of an uneven recovery.
                                  • Lockheed Martin plans to manufacture between 133 and 139 examples of its F-35 stealth fighter in 2021, a number about the same as 2019 levels, but below previous projections as the program continues to feel the lingering effects of the coronavirus pandemic. Lockheed Martin, which fell short of the 2020 goal to produce 142 F-35s, cited pandemic-related supply chain disruptions as a primary cause. It could take until at least 2023 for the manufacturer to catch up on the missed deliveries.
                                  • The US government is requiring travelers to show proof of a recent negative COVID-19 test before boarding flights to the US.
                                  • Boeing CEO David Calhoun said that the company plans to have 130,000 employees at the end of 2021, down from 160,000 at the beginning of 2020. Boeing had already announced that more than 19,000 employees would be leaving this year, according to The Associated Press.
                                  • About 84% of companies in the US, Europe, and Asia that were surveyed by Bloomberg plan to spend less on travel post-pandemic. Firms including Pfizer, Michelin, LG Electronics, HSBC Holdings, Hershey, Invesco, and Deutsche Bank AG, are signaling that innovative new communications tools are making many trips unncecessary. A majority of the respondents cutting travel budgets expect reductions of between 20% and 40%. Spending on corporate trips could slide to as low as $1.24 trillion by 2024 from a pre-pandemic peak in 2019 of $1.43 trillion, according to the Global Business Travel Association.
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