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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Nov 14, 2022 - Industry Faces Talent Challenges
                                  • A desire among aerospace workers for wage increases and more flexible work options are among the key findings and challenges revealed in the 2022 Aerospace & Defense Workforce Study released in October. The 2022 survey of some 850,000 employees globally, highlighted the talent challenges aerospace and defense (A&D) companies face in their ongoing efforts to meet workforce demand. Turnover across the A&D industry rose to 7.1% in 2022 from 5.7% last year. Decades-high inflation is driving employees’ desire for wage increases with 78% of responding companies citing employees seeking opportunities for higher pay as a primary cause of higher attrition. And despite operations that aren’t always compatible with remote work, nearly two-thirds of A&D organizations reported the successful implementation of flexible work options for employees, such as hybrid models, four-day workweeks and staggered hours.
                                  • Boeing has laid out a plan to recover from the biggest crisis in its history – two 737 Max crashes in 2018 – the pandemic, and regulatory problems, The Wall Street Journal reported in November 2022. The company, which trails French rival Airbus in jetliner production, says it’s focused on boosting 737 production to around 50 a month by 2025 or 2026, up from 23 in October. Boeing CFO Brian West said the company expects to deliver up to 450 of its 737s next year, up from the 375 the company currently expects to deliver in 2022. The increase in production is key to Boeing’s plan to boost its financial performance. West told investors Boeing expects to generate about $100 billion in annual sales by 2025 or 2026, a level it hasn’t reported since 2018, according to WSJ, and resume paying dividends or buying back its stock.
                                  • Amid rising demand for air travel, US carriers are facing a shortage of spare parts needed to keep existing planes in operation, The Wall Street Journal reported in October 2022. Both Boeing and rival Airbus continue to struggle with supply chain challenges that are hindering their ability to meet delivery commitments to carriers. Demand is especially acute for single-aisle jets like 737s, the workhorses of domestic air travel. Demand for single-aisle jets is expected to exceed the plane makers’ supply for at least the next three years, executive chairman of Air Lease Corp., a buyer and lessor of jets, Steven Udvar-Házy told WSJ. Boeing is pausing production of 737s whenever suppliers run short on parts or provide defective components and won’t produce new airplanes without engines, WSJ reports.
                                  • United Airlines in September 2022 announced a $15 million investment in Eve Air Mobility and a conditional purchase agreement for 200 four-seat electric aircraft plus 200 options, expecting the first deliveries as early as 2026. Eve Air Mobility is a Brazilian startup backed by aircraft manufacturer Embraer. Previously, in August, United made $10 million in predelivery payments for 100 aircraft being developed by Archer Aviation, a maker of all-electric vertical take-off and landing aircraft, The Wall Street Journal reported. Eve Air Mobility and Archer Aviation are players in the nascent urban air mobility (or flying taxi) market. Other airlines have also announced investments in flying-taxi startups and preliminary orders, though the aircraft haven’t yet been approved by regulators to fly passengers, WSJ reported.
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