This is marketing research on the Aviation or aerospace – Australia industry and can include information on the background, market structure, definitions, competitors, trends and developments of aviation or aerospace – Australia and is related to other topics such as airlines and defense.

Aerospace Market Brief – Australia December 2007

The Australian economy is larger than the economies of all of the other countries in South East Asia combined. It is one of the key markets, and is net importer for aviation, aerospace, and defense products in the Asia Pacific region. Annual imports from the United States (HS 88) over the past six years have averaged $1.7 billion, representing 55%-60% of Australia’s total imports in this sector.

MARKET OVERVIEW

Australians own more aircraft per capita than any country outside North America, with over 12,900 registered aircraft.

There is very little actual aircraft manufacturing. The Australian market is strong in the supply of aircraft components and spares, and is skilled in aircraft modification, repair and maintenance, system design and development, and aviation training. Owing to the prominence of U.S.-manufactured aircraft, there is a strong aftermarket for U.S.-produced equipment in all areas of aviation and aerospace in Australia. U.S suppliers have an unmatched reputation for quality and service throughout the agent/distributor-manufacturer relationships that characterize market supply in Australia. The market is comprised of three main areas – defense, commercial aviation, and general aviation.

Defense

The Australian defense budget is close to $19 billion for financial year 2007-2008, with a capital expenditure target of $5.4 billion. Operational activities have necessitated budget increases, but capital expenditure remains firm.

General aviation

The majority of the aircraft on the Australian Aircraft Register are small aircraft, the number of which is increasing by between 1.5% and 2.5% per year. Cessna and Piper dominate the register with around 45% of total registrations. Major areas of general aviation activity in Australia are agricultural, private and training activity, charter operations, business flying, sport aviation, and a growing interest in kit aircraft and ultralight activity. Charter is the largest sub-segment, at around 28% followed by training 24%, aerial work 23%, and private and business transport at 23%. Search and rescue operations, fire fighting and police forces, and medical services use a variety of rotary and fixed-wing aircraft.

Commercial aviation

The commercial aviation segment accounts for around half the demand in the Australian market. Qantas/Jetstar dominates commercial aviation activity in Australia, with Virgin Blue claiming 30% of the domestic travel market. Virgin Blue operates B737 aircraft, with a maintenance facility in Brisbane. The Qantas fleet includes Boeing, and Airbus aircraft. It has orders for A380s, and for Boeing 787s.

MARKET TRENDS

Australian distributors are interested in traditional areas such as avionics, ground support equipment, and parts and spares. In vogue are products, equipment or technology that improve fuel efficiency. There is a growing interest in FAA approved, Parts Manufacturer Approval (PMA) parts.

Radar covers only about 5% of Australia’s total airspace. Where radar is not available, the aircraft position information uses other sources, including, current flight plan data, and Automatic Dependent Surveillance Broadcast (ADS-B). End 2008 is the target date for installation and operation of all ADS-B stations.

MARKET ACCESS

Competition is the only major factor limiting access to the Australian market. The Australian Civil Aviation Authority accepts FAA certification and standards, easing the way to U.S. suppliers. The U.S has a reputation for quality, experience, and after-sales service.

MARKET ENTRY

Success in the Australian market requires establishing a local sales presence, either through a local agent or distributor, or if business warrants it, a local subsidiary. In general, local firms usually distribute a range of spare parts for different manufacturers, and prefer order directly from manufacturers.

SOURCES OF INFORMATION

Airservices Australia Airservices Australia provides air traffic services and telecommunications facilities for civil aviation in Australia. In addition, where required, Airservices Australia provides Aerodrome Rescue and Fire Fighting Services at civil aerodromes. www.airservices.gov.au/

For more information, please visit The U.S. Department of Commerce

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