Top trends in aerospace manufacturing
Aerospace manufacturing constantly changes as new challenges emerge every day. Technology advancements and global politics dictate the industry’s direction moving forward. Here are three top trends in aerospace manufacturing to pay attention to and how they can be expected to affect industry growth.
As technology advances, customer demand for new aircraft increases. Improved operating efficiency, advanced avionics, refined interior cabin design, and reduced noise are attractive new amenities for most buyers. Retiring and replacing older units drives demand for new aircraft making improved design and fuel efficiency very attractive to potential customers.
Additionally, new manufacturing technology is a driver of aircraft demand. Wider composites use, advanced manufacturing technology requirements, and conversion to new electrical systems improve the next generation of planes. The changes can pose a challenge for suppliers who struggle to keep up with changing manufacturer demands. So, the supply side needs to remain nimble and flexible to adapt to those evolving needs.
While physical manufacturing may have its challenges, digital manufacturing is more likely to gain momentum without such hindrances. Progress in digital manufacturing should yield more fuel-efficient engines and continued reductions in aircraft weight.
Historically, defense contractors among aerospace manufacturers have conducted business with foreign countries at arm’s length, doing nothing more than exporting products. The U.S. and its largest allies have traditionally made limits on defense system purchases. Individual nations are now making these decisions for themselves, which changes the rules aerospace manufacturers must follow.
This change makes negotiations for defense contractors more difficult, requiring them to deal with buyers on a country-by-country basis. Defense contractors will need to assess which buyers are appropriate to do business with and tailor a program to that country according to politics, alliances, threats, and goals. Manufacturers will also need to maintain relationships with existing clients as the valuable experience gained in those dealings offers accessible and stable opportunities that new clients will be able to offer. The arm’s length approach will not lend itself to these specifics, so defense contractors need to build closer relationships with each country out of necessity.
The strength of the U.S. dollar also has a role to play in dealing with other countries. Since June 2014, the dollar has increased 20 percent against currencies of America’s major trading partners, and has grown even stronger against emerging market currencies. This, however, makes it more expensive for other countries to purchase from U.S. contractors, incentivizing buyers to look elsewhere. U.S. contractors may try to compete with this by offering cooperation and collaboration as perks in addition to equipment, supplies, and services.
The price of oil has remained low since 2014. Airlines save on fuel because of the low price, and they may delay replacing existing planes. The new aircraft may be more fuel-efficient than current models, but replacement may not be perceived as worthwhile if the price of a new craft is more than what they save on fuel.
Even so, airlines do not actually seem to be reducing their rate of retiring and replacing aircraft due to oil prices. Business plans for investing in new aircraft typically cover a 20- to 30-year horizon, which is not significantly impacted by a short-term price reduction. Even if oil prices remain low in the long term, it may encourage continued growth in the industry. Low fuel costs still mean that airlines can offer lower fares.
The three trends in aerospace manufacturing to pay attention to ad are technology advancements, changing relationships and oil prices. They are are expected to affect industry growth in the coming years.