What to Expect From the Aerospace & Aviation Industries in Coming Years — Part I

What-to-Expect-From-the-Aerospace-&-Aviation-Industries-in-Coming-Years-—-Part-I

The aerospace and aviation industries are primed for another strong year, according to Deloitte.

In fact, demand for commercial aircraft is so high there is an order backlog of more than 14,000 planes — with an expected 38,000 aircraft to be produced over the next 20 years.

Manufacturers will need to increase production to meet growing demand, which means they will need to utilize advanced technologies and focus on strengthening the supply chain to promote effective program management.

As demand rises, what can we expect from aerospace and aviation moving forward? Below we explore a few things to look forward to in 2019 and beyond:

Aerospace Manufacturers Will Continue to Increase Production

With order backlog at an all-time high, manufacturers are expected to continue ramping up to meet demand. In fact, Boeing and Airbus are expected to significantly increase production in the coming years, according to Capstone Headwaters. Boeing will increase output by 6% to 810 to 815 planes and Airbus will increase by 11% to 800 planes.

Many Firms Are Outsourcing Their Supply Chains

In the past, the aerospace and aviation industries have been slow to partner with third parties for supply chain management due to strict Federal Aviation Authority (FAA) requirements. However, as more and more logistics partners invest in aerospace expertise, many manufacturers are now outsourcing work to these firms — from coordinating aircraft on the ground (AOG) services to overseeing engine moves and other functions.

Carbon Fiber = Cost-Savings

Carbon fiber and composites are offering manufacturer’s significant cost savings in maintenance costs, as it offers a much more fuel-efficient and lightweight alternative to steel and iron. This has caused more manufacturers to adopt these components across their entire fleet, increasing production rates and lowering material costs.

Global Airline Passenger Traffic Is Exceeding Growth Forecasts

Capstone Headwaters found that global airline passenger traffic grew 7.5% in 2017, exceeding 4.5% growth forecasts. Much of this growth is based on the Asia Pacific region, which showed the strongest growth in traffic at 10%. Meanwhile, Europe, Middle East, Latin America, and Africa all grew 7% with North America only growing 4%. The growth was due, in part, to online booking tools and other technology improvements.

More Reliance on Automation Efficiencies

In more human-centric manufacturing, the creation of small and specific parts for the aerospace industry has been difficult, costly, and time-consuming. For companies focused on making these parts, automation offers new and more advanced work, frequently with better benefits.

A few years ago, Marlin Steel opted to manufacture more high-quality precision products for clients like Boeing to better compete and increase sales. Marlin Steel was able to accomplish this through robotics and automation that let them produce these advanced products, and in the process, they created more jobs and higher wages for employees. As manufacturers realize the benefits of robotics and automation, they are expected to continue relying on these advanced technologies to improve precision and accuracy.

A Strong Outlook for Growth

While the aerospace and aviation industries experienced more subdued revenue growth last year, the sector is expected to strengthen further this year — thanks to increased commercial aircraft production and strong defense spending.

Stay tuned for Part II of our blog to learn more about what to expect in the aerospace and aviation industries in the coming years, including increased M&A activity and the power of big data.

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