Overall aerospace market out of the red, into the black, says Teal Group’s Aboulafia at IESF

EVERETT, Wa., 29 April 2014. The aerospace market logged $170 billion in new aircraft deliveries in 2013, and large commercial airliners accounted for well over half of this market, says Richard Aboulafia, vice president of analysis at Teal Group Corp., in “Back in Black: Aviation/Defense Industry Overview and Forecast,” his keynote presentation at Mentor Graphics’ Integrated Electrical Solutions Forum (IESF) in Everett, Wa.

“Jetliners are it, reaching $94.4 billion last year, following a lot of red ink in 2008 to 2012; manufacturers reacted to this by going into hyper growth mode,” says Aboulafia, who has been covering the market for decades but had never seen this trend before.

“The real secret sauce is the connection between engineering and customers – learning what they want,” Aboulafia explains. “Good management and talking to customers – and letting engineers talk to customers and figure out what they will pay for. The people who want to kill their planes will not give engineers that freedom.”

Aerospace market snapshot, courtesy of Aboulafia:

- $170 billion in new aircraft deliveries in 2013

- Large commercial jet airliners (Boeing, Airbus, Bombardier, and Embraer) constitute more than half of the aerospace market, equating to $94.4 billion last year.

- Aerospace market is in the black, after a lot of red ink in 2008-2012

- Manufacturers are in “hyper growth mode”

- Military aircraft market eroding; the sky is not falling, but it is eroding due to budgets, politics, and overwhelming investment in one combat aircraft (Lockheed Martin F-35)

- Rotorcraft are alive and well, with manufacturers focused heavily on exports

- Technology firms cannot ignore the impressive growth in commercial aviation and commercial space, and are shifting focus to include commercial and general aviation

- Commercial aircraft production has increased over 10 percent annually over the past 10 years and is at a peak