an order book of more than 9 years of production
The civil aeronautics industry is dominated by Airbus and Boeing. Both companies have large order books that should keep their production lines busy for almost a decade. Long term cycle and the continued attractiveness of existing product lines mean that the order books look set to expand.
Bombardier and Embraer have fared less well. Their attempt to shift from domestic markets to regional ones puts them in direct competition with the two aeronautic giants. The development of new plane models such as C series and 190 to corner the medium-haul market proves thus challenging. Orders books still have to be secured while very high levels of investment have already been incurred.
The increase in aircraft production each year and the necessity of internationalization present challenges for the entire supply chain. The level of required investment in capacity production and new technologies (such as composite materials) and for working capital requirements, are very high. This is all the more challenging for small players and thus raises questions regarding the sector’s structure.
- Large order book giving a positive and stable long-term outlook
- High level of profitability
- Global market is controlled by two major players - Airbus and Boeing
- Implementaton / application of new technologies such as composite materials
- Undersized suppliers
aeronautics Subsectors insights
Tier 1 suppliers: International companies which can meet financial requirements for their investments
Tier 2 & 3 suppliers: Smaller companies facing difficulties to finance growth, R&D investments and internationalization
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