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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 14, 2022 - US Push for Additive Manufacturing
                                  • President Biden in May launched a new national program called Additive Manufacturing Forward (AM Forward) to broaden 3D printing use among US-based small and medium-sized suppliers. The administration enlisted GE Aviation, Lockheed Martin, and Raytheon, among other corporate partners, to commit to helping smaller businesses adopt additive manufacturing, aka 3D printing, to boost efficiency and competitiveness. Helping their smaller suppliers adopt new technologies will help the US “continue to be the leading exporter of aircraft and engines and in areas like medical devices and clean energy technologies,” Biden said. Lockheed Martin, Raytheon, and the other initial members of AM Forward have signed letters of intent outlining their specific commitment to increasing demand for 3D-printed parts, as well as providing training opportunities to suppliers’ workers, offering detailed technical assistance, and engaging in standards development.
                                  • With the number of global air passengers expected to nearly double over the next 20 years, the aviation sector is prioritizing technologies and policies to achieve net zero carbon emissions by 2050, according to a new report from the Aerospace Industries Association (AIA) and Accenture. The industry aims to embed “sustainability into every stage of the manufacturing and delivery of products and services,” says John Schmidt, global Aerospace and Defense industry lead at Accenture. The report, Horizon 2050: A Flight Plan for the Future of Sustainable Aviation, evaluates technology solutions based on emission-reduction potential, maturity status, and applicability within time horizons relevant to aircraft entry-into-service, including near-term and market-ready technologies (today-2030); mid-term technologies, typically in planning stages (2030-2040); and longer-term technologies, mostly in research and development (possible market entry beyond 2040). Airlines that have announced programs to become more sustainable include Delta Air Lines, which has committed $1 billion to become carbon neutral by 2030, JetBlue, and United Airlines, as well as many global airlines.
                                  • Aircraft engine and parts manufacturers must acquire a Commerce Department license to export aircraft parts to Russia and Belarus due to US sanctions stemming from Russia’s invasion of Ukraine. However, firms must presume that exports will be denied by the Commerce Department. Exports that fall under the safety-of-flight designation are being analyzed on a case-by-case basis. Existing export license exemptions are not applicable due to the sanctions. Aircraft parts manufacturers are also expected to abstain from selling to intermediaries that they know will sell those products to Russia or Belarus. Doing so is an illegal violation of sanctions.
                                  • Many experts in early 2022 agreed that it would take another year for the semiconductor shortage to subside. Patrick Gelsinger, CEO of semiconductor manufacturer Intel, anticipates incremental improvements in each financial quarter but warns that it is unlikely that supply will meet demand before 2023. Intel and other companies plan to build new chip factories in the US, Europe and Japan to avoid future semiconductor shortages.
                                  • 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, cited innovative new communications tools that make many trips unnecessary as a key driver of the change. 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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