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Aircraft Engine and Parts Marketing Research

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This is marketing research on the Aircraft Engine and Parts industry and can include information on the background, market structure, definitions, competitors, trends and developments of aircraft engine and parts and is related to other topics such as planes, repairs, maintenance and accessories.

Table of Contents

1 Background
2 Market Structure
3 Industry Definitions
4 Market Metrics
5 Industry Players
6 Trends and Recent Developments
7 Sources
8 Related ResearchWikis
9 Buy these reports from ReportBuyer - Lowest to Highest Cost

[edit] Background

Aircraft engines refers to the reciprocating and rotary internal combustion mechanisms or engines used in propelling aircraft. To be commercially viable, efficient engines ideally need to possess the following properties:

Light weight
Small and easily streamlined
Powerful
Reliable
Repairable

Many of these properties would seem to be contradictory and within that lies the obstacle to commercially manufacture these in quantity and with reliability. Clearly, engines cannot fail as there is no room for error while the aircraft is in the air. Second, they must be capable of moving aircraft that may weigh 400 to 500 tons. Most aircraft use multiple engines in a combination of two to four on an aircraft. Smaller jets or military aircraft often have only one engine while a large transport may sometimes have six engines.

The industry “Aircraft Engines and Engine Parts” includes establishments engaged primarily in manufacturing aircraft engines and engine parts. It also includes establishments which are owned by aircraft engine manufacturers and primarily engaged in Research and Development on aircraft engines and engine parts.

The total value of complete aircraft engines in the U.S. was down in 2002. It represented a decrease from the prior year 2001 levels of US $7.3 billion and 2000 production of US $7 billion. Along with the decrease in total shipment values, unit shipments also declined right after the 2000.

The demand for aircraft engines depends mostly on aircraft production levels themselves. In the early 2000s, the larger aircraft industry was suffering from the negative effects of a recession in the air transport sector and the demand for new aircraft had slowed considerably. This recesssion negatively affected orders for new aircraft and thus had an impact on the market for aircraft engines. That situation has changed significantly mid decade as orders for large commercial aircraft has climbed significantly as have those for smaller manufacturers. Both major aircraft manufacturers, Boeing and Airbus Industries have seen a continuing stream of new orders and they are introducing hundreds of new aircraft annually - the 787 Dreamlinier and the A380 starting in the next couple of years. These represent a new class of “heavy” aircraft and the engines necessary to lift them are highly complex and expensive.

Aircraft engine manufacturers enjoyed a long period of industry growth from the end of the Second World War until the first half of the 90s. At that time, changes in military spending and changing commercial air travel patterns caused major shifts in industry planning and predictions. By late 90s, the future of the aircraft engine market seemed likely to depend on the development of various kinds of bigger engines.

[edit] Market Structure

Production of aircraft engines was once controlled by the same companies which assembled aircraft and operated airlines. Industry regulations enacted in 1934 prompted aircraft engine manufacturers to form a separate identity from the aircraft manufacturers themselves. This regulation is partially responsible for the intense competition that characterizes the aircraft engine industry today. The leading engine manufacturers generally try to provide engines to fit the needs of a wide range of aircraft. Aircraft manufacturers generally start to set out requirements for engines and select a design for the engine at the concept stage of a new aircraft. Once the engine is finalized, the engine manufacturer may try to adapt the design for other aircraft and enjoy economies of scale. It is common to find the same engine running on a variety of competing aircraft. It was very common during World War II to see derivatives of one engine being used for a single engine fighter as well as a twin engine bomber or even being sold as a piece of equipment for a another country's aircraft.

In the decades immediately after World War II, government funding for military aircraft supplied much of the money for research and development. This subsidized the American manufacturers and helped them continually upgrade the engines they sold. A technical innovation developed for a military projects found its way readily into commercial engine applications. Engine manufacturers found significant profit in these commercial engine sales. Conversely, this arrangement changed considerably in the 1990s when the Cold War ended and there was less demand for new engine designs for the military. The U.S. military budget decreased and the demand, for example, for new military transports – similar in size to large commercial aircraft - fell sharply. Few were produced and thus innovation in new large engines became the direct responsibility - and a cost - of the private sector manufacturers. High research and development spending had to be built into the price of their engines.

The leading U.S. aircraft engine manufacturers are divisions of larger establishments. Pratt & Whitney is a division of United Technologies and GE Aircraft Engines is a unit of General Electric. Another key player for large aircraft engines is Rolls Royce Group PLC in the U.K. There are numerous smaller manufacturers of aircraft parts such as Lycoming, a division of Textron Corporation.

[edit] Industry Definitions

Piston engine - uses one or more pistons to convert pressure into a rotating motion.
Wankel engine - type of internal combustion engine. It uses a rotor instead of reciprocating pistons to convert pressure into rotating motions.
Turbo-compound engine - a compound engine. It uses a blow-down turbine to recover energy from the exhaust gases of a piston engine. The turbine improves the performance of the engine without increasing the fuel consumption.
Jet engine - discharges a fast moving jet of fluid in the back to generate thrust forward. Most jet engines are internal combustion engines.

[edit] Market Metrics

Top Ten Exporters (US $’000) includes aerospace and associated equipment and parts:

	Country	        2001	     2002	   2003	          2004	           2005
	U.S. 	     44,688,612	  43,876,404	39,598,602	42,095,103	49,793,290
	France 	     17,209,629	  17,169,665	19,219,687	21,945,554	24,460,067
	Germany      17,174,529	  16,313,247	16,419,450	17,978,212	19,273,154
	Canada 	      8,554,233	   7,416,979	 7,908,625	 7,257,128	 7,980,447
	Italy 	      2,751,140	   3,869,782	 2,701,757	 3,380,324	 3,404,577
	Brazil 	      3,553,510	   2,798,690	 2,049,892	 3,371,301	 3,302,832
	Spain 	      1,342,552	   1,846,354	 1,739,200	 2,704,673	 2,809,857
	Singapore       850,356	     936,658	 1,191,481	 1,245,870	 1,505,207
	Japan 	      1,729,388	   1,294,581	 1,497,873	 1,170,224	 1,411,390
	Netherlands 	599,057	     586,510	   789,097	   983,464	 1,085,295

Top Ten Importers (US$ ’000) - includes aerospace and associated equipment and parts:

	Country	       2001	    2002	   2003	           2004	           2005
	Germany      13,979,227	  11,862,803	13,082,675	16,689,337	19,441,485
	USA 	     21,180,142	  18,063,413	17,057,916	16,558,525	16,568,718
	France 	      6,172,356	   6,711,546	 8,151,716	 9,939,777	11,113,185
	China 	      4,542,722	   4,051,120	 4,460,636	 4,989,641	 6,561,195
	Canada 	      5,046,346	   4,522,881	 3,437,852	 3,619,663	 5,336,813
	India 	        260,727	     969,185	 1,154,706	 1,569,892	 4,998,920
	Japan 	      1,970,300	   3,723,920	 4,409,678	 4,143,318	 4,822,429
	Singapore     3,805,102	   3,136,258	 3,879,668	 3,990,189	 3,751,226
	Spain 	      1,805,533	   1,782,085	 1,608,830	 2,583,371	 3,211,721
	Italy 	      3,404,350	   3,987,422	 2,874,144	 2,829,489	 3,006,917

The U.S. is the clear leader in aircraft engine exports. Again the top three players, dominate the market (see below).

[edit] Industry Players

General Electric Corporation was the world's manufacturer of military and commercial aircraft jet engines during the initial years of the 2000s. It also produces and services small jet engines for airlines, charter & leasing companies and the military. GE Aircraft Engines attained approximately US $14 billion in revenue in 2006-07.

Rolls-Royce Group PLC of the UK has 500 different airlines and over 100 militaries as its prime customers. The company registered sales of approximately US $7 billion in 2006-07.

Pratt & Whitney is a division of United Technologies and also owns Sikorsky aircraft, a primary producer of military and commercial helicopters It claims to have supplied engines to more than 50% of the world's commercial airliners in the late 90s and early 2000s. In 2006-07, the company had aircraft related revenues of approximately US $11 billion.

Other key players from past and present in the market includes the following:

BMW (Germany)
Bristol Engine Company (UK)
Bristol Siddeley (UK)
CFM International (USA and France)
Continental Motors (USA)
Curtiss-Wright (USA)
Daimler-Benz (Germany)
de Havilland (UK)
Ford Motor Company (UK)
Hispano-Suiza (France)
Honda (Japan)
Kuznetsov (Russia)
Avco Lycoming (USA)
Napier & Son (UK)
Pratt & Whitney Canada (Canada)
Rotax (Austria)
Snecma Moteurs (France)
Turboméca (France)
Volvo Aero (Sweden)
Westinghouse (USA)

The majority of key players are from the the U.S. and Western Europe. Production requires high technical sophistication, very refined processes and manufacturing and significant investments in research and development.

[edit] Trends and Recent Developments

In the first few years of the new century, the aircraft industry was troubled by factors such as 9/11 and resulting decreased demand for air travel. The demand for aircraft engines is directly derived from the performance of the aircraft industry. Therefore, along with the reduced orders for new engines, market conditions also created a decrease in demand for parts and repairs.

That has largely changed in 2005 through 2007. Most airlines are operating at record passenger loads and there is renewed demand for new aircraft and engines, as many airlines have individual aircraft approaching the end of the active and viable service lives. Some of these aircraft are 20 or more years old. Demand for new aircraft engines and parts is expected to be strong out past 2010.

The mix of revenues and profits for manufactures will continue to be a challenge. In 2002-3, forty percent of GE’s total revenue came from parts and repair services and about two-thirds of its operating profit was contributed by the same. The company is therefore heavily dependent on after-sales services. At the same time, the larger industry players continue to look at new partnerships and to spread the risk of production by sourcing parts from suppliers in many countries.