Next-gen aircraft to drive commercial aviation
The commercial aircraft sector will enter a prolonged upturn in production in 2012, largely due to increase demand from airlines for fuel-efficient, next-generation aircraft.
This is the view of Deloitte Touche Tohmatsu’s ‘2012 Global Aerospace & Defense Outlook’, which was released on Friday.
According to the report, the growth in the commercial aircraft industry is expected to be driven by continued production and development of new, ‘next-generation’ aircraft programmes that aim to address the problem of increasing fuel costs. These include Airbus and Boeing’s new narrow-body aircraft programmes, the A320neo and B737 MAX, which will be equipped with new fuel-efficient engines and other fuel-saving devices such as wing-tips.
Deloitte noted that the A320neo and B737 MAX, along with the Mitsubishi Regional Jet (MRJ), AVIC ARJ21, Irkut MS-21 and Embraer ERJ product line, have racked up 4,720 orders and options, making them among the best-selling products in aircraft production history.
“The commercial aircraft sector has taken an innovative approach to responding to increasing fuel costs,” said Tom Captain, Deloitte’s Global Aerospace & Defense Sector Leader. “The development of fuel-efficient aircrafts that utilise next-generation engine technology has resulted in a significant rise in aircraft orders. However, certain suppliers will be challenged to keep pace with the expected increase in production rates and new program introductions this year.”
China is expected to continue the modernization of the aerospace industry, with several development programs including the COMAC C919 single-aisle aircraft, which is expected to enter into service in 2016. COMAC forecasts that 2,000 C919 aircraft will be produced over the next 20 years, accounting for almost 7% of market share. COMAC is also developing the ARJ-21 regional aircraft, which is expected to be delivered this year.
Deloitte’s report stated that these two aircraft programs mark the emergence of China as a “credible producer of commercial air transportation products”.
Overall, the financial performance of the top global aerospace companies in 2012 is expected to be similar to 2011 performance, with the commercial aircraft sector driving profits. Boeing and Airbus’ parent company EADS achieved profit growth of 9.8% and 10.9% respectively in 2011. This compares to defence-focused aerospace rivals such as Lockheed-Martin, which saw a 1.2% decline in profits.
Deloitte also noted that human resources is likely to be one of the biggest challenges for aerospace companies in the coming years. The shortage of engineers and production workers in the US “represents a major challenge to productivity”, the report stated.