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 1,060 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 167 workers and generates $58 million in annual revenue.

    • The industry includes about 1,060 firms, generating about $61 billion in annual sales and employing 177,500 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.
    • Large commercial aircraft manufacturing customers include Boeing, Airbus, Bombardier, and Embraer. The 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

                                  Mar 20, 2024 - Producer Prices, Wages Rise
                                  • According to data from the Bureau of Labor Statistics (BLS), producer prices for aircraft engine and parts manufacturers climbed steadily for the first nine months of 2023. While employment in the industry has risen in the past two years as demand for aircraft has increased, it still has not reached pre-pandemic levels. Industry labor costs increased through December 2023, rising 5% year over year and reaching an average hourly wage of $45.91, per the BLS.
                                  • All aircraft segments increased year over year in shipments, and preliminary aircraft deliveries increased in value by over 3% to $27.8 billion in 2023, according to the annual General Aviation Aircraft Shipment and Billing Report released by the General Aviation Manufacturers Association (GAMA). The value of airplane and helicopter deliveries in 2023 increased by 2.5% to $22.9 billion and 5.4% to $2.7 billion, respectively, from 2022. Piston airplane deliveries saw an 11.8% increase in 2023 over the previous year to 1,682 units, turboprop airplane deliveries saw a 9.6% increase to 638 units, and business jet deliveries saw a 2.5% increase to 753 units. Helicopter deliveries increased in 2023 over 2022: 7.7% for piston helicopters and 10.4% for turbine helicopters. Added Pete Bunce, GAMA President and CEO, “While the deliveries from 2023 are very encouraging, our industry faces headwinds from ongoing supply chain issues, workforce shortages, uncertainty and unpredictability from global regulators, and short-sighted efforts aimed at curbing business and general aviation, particularly in Europe.”
                                  • US manufacturing activity contracted in February 2024, falling below the baseline for growth for the sixteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.8% in February, down 1.3 percentage points from the 49.1% recorded in January. A reading above 50% indicates manufacturing expansion. February’s New Orders Index was in the contraction zone at 40.2%. The February Production Index was 48.4%, a decrease from January’s 50.4%. Eight manufacturing industries tracked by the ISM reported growth in February: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; and Transportation Equipment. The industries reporting contraction in February were Furniture & Related Products; Machinery; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; and Electrical Equipment, Appliances & Components.
                                  • Higher demand for air travel and a more consistent supply chain are expected to support growth in the US aircraft engine and parts manufacturers industry, which is projected to grow at an over 9% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is faster than the projected growth of the overall economy. The forecast follows several years of sales volatility during the pandemic in 2020 (-37%), 2021 (15.1%), and 2022 (25%).
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