Aircraft

The business of building aircraft will be growing from 4,930 aircraft in 2016 to approximatly 5,066 in 2025. In total the aviation industry will build over 52,000 aircraft in a ten years period. The value of the total production is almost 2,000 billion US dollar, growing from 186 in 2016 billion to 197 billion in 2025.

The words, numbers, and graphs in this article illustrate who is building aircraft now and who will be in ten years. But the numbers represent only the value of deliveries; they exclude the broader footprint of the industry, which is about two to three times as large as the value of total new build deliveries. The numbers also exclude business.

It’s estimated that the RDT&E and the generally more lucrative after-market support, plus upgrades, are worth about 200% of the value of new aircraft manufacture annually. Therefore, since the new aircraft market is worth 180 to 210 billion US dollar per year, it’s calculated that the total aircraft industry contributes 700 to 900 billion US dollar annually to the world economy. And this figure excludes numerous related industries, such as airlines, air traffic control, and military air base support services.

Industry figures and trends:

• The aviation industry remains the healthiest industrial segment of the world economy. After a brief hiatus in 2010, aircraft deliveries remain back on their decades-long growth trend. Both civil and military markets look set for growth through the end of the decade. While a handful of sub-segments and programs remain weak, suppliers with diverse program exposure continue to enjoy modest top line growth.
• We forecast production of 52,673 turbine-powered aircraft worth $1.999 trillion between 2016 and 2025. The military component of this market is worth $484.5 billion, while the civil sector is worth $1.45 trillion.
• The numbers exclude uninhabited aircraft, non-turbine aircraft, maintenance, overhaul, upgrades, and research. If all of these were included, along with aggregate revenues from the broader aircraft manufacturing industry, the market would be worth over 8 trillion US Dollar to the world’s economy over the next ten years. Compared tot he past 10 years this represents nearly 40% growth.

DARK CLOUDS LOOM

The world aircraft industry is still growing. That’s the good news. The bad news is that the industry’s growth rate downshifted significantly in 2016. Meanwhile, the sluggish level of growth that remains is threatened by several looming macroeconomic trends. Most of all, the jetliner primes’ lofty production goals appear out of line with economic reality.

Several market segments have already been impacted. The result was a weak 2% growth rate for 2015 over 2014, measured in value of deliveries. This compares with the strong 7.1% compound annual growth rate (CAGR) the industry enjoyed in 2010–2014.

Weak energy prices are the second culprit. Inexpensive fuel reduces the incentive for airlines to replace their older jets, and last year saw a worrying 38% decline in older jetliner retirements. Cheap oil and other commodities also reduce demand for oil field exploration and support helicopters.