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Aerospace Industry - UK - October 2015

“The UK has invested in innovation and built on its established institutional knowledge to ensure a highly developed aerospace sector, enabling it to attract investment both domestically and internationally on high-value work packages. For the UK to continue to compete globally, continued investment in high-value design, skills, innovation and capacity is vital.”
– Lewis Cone, B2B Analyst

This report answers the following key questions:

  • What are the key determinants driving the aerospace industry?
  • Was the market affected by the financial crisis and how has it recovered since? Has there been any structural changes as a consequence?
  • How has the government influenced and shaped the development of the sector?
  • What are the key issues the UK industry needs to address to maintain its global position in an ever-competitive market?
  • How have companies adapted to cost and environmental pressures?
  • What does the future hold for the UK aerospace industry?

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Table of contents

  1. Executive Summary

      • Market size
        • Figure 1: UK aerospace equipment turnover, 2010-2014, (£ billion at MSP)
        • Figure 2: UK aerospace equipment turnover, by sector, 2010-2014, (£ billion at MSP)
      • Market trends
        • Figure 3: Regional analysis of global air passenger traffic development, 2011-2015*, five-year average, (% change in RPK)
        • Figure 4: Forecast development of the global airline fleet, by aircraft type, 2014 and 2034, (% of total)
      • International trade
        • Figure 5: UK imports of aerospace equipment, 2010-2014, (£ million at CIF)
        • Figure 6: UK exports of aerospace equipment, 2010-2014, (£ million at FOB)
      • Market factors
        • Stagnation in global defence spending levels affecting growth opportunities
          • Emerging markets pose threat to UK’s leading industry position
            • ATI launches first aerospace technology strategy to help boost productivity and investment
              • Global middle-class population growth makes it a key target market
                • Companies
                  • Forecast
                    • The number of mainline jet deliveries is forecast to exceed 30,000 over the next two decades
                      • Figure 7: Forecast world mainline jet deliveries, by type, 2015-2034, (Number)
                    • Asia-Pacific expected to have the largest airplane fleet in the world by 2034
                      • Figure 8: Forecast world airplane fleet, by region, 2014 and 2034, (% of total)
                    • Defence expenditure limits predicted to marginally decline until 2016 at the earliest
                      • Figure 9: Forecast UK DEL on defence, 2015/16-2017/18, (£ million)
                    • What we think
                    • Key Insights

                        • Can the UK maintain its industry-leading position?
                          • How are companies responding to the drive for sustainability and efficiency in the aerospace manufacturing process?
                            • Where are the key development opportunities for the industry?
                            • Introduction

                                • Definitions
                                  • Methodology
                                    • Abbreviations
                                      • Market positioning
                                      • UK Economy

                                        • Key points
                                          • Overview
                                            • Figure 10: UK GDP, 2004-2015, (% quarterly growth and GDP in £ billion)
                                            • Figure 11: Quarters after GDP peak, 1979, 1990 and 2008, (Number of quarters and GDP as % of pre-downturn peak)
                                          • Inflation
                                            • Interest rates
                                              • House prices
                                                • Consumer spending
                                                  • Manufacturing
                                                    • Business investment
                                                      • Figure 12: UK GFCF 2003-15, (£ million)
                                                    • Imports
                                                      • Exports
                                                      • Market Factors

                                                        • Key points
                                                          • Stagnation in global defence spending levels affecting growth opportunities
                                                            • Demand from commercial airlines continues to drive industry development
                                                              • Emerging markets pose threat to UK’s leading industry position
                                                                • Outsourcing providing a challenge to UK aerospace companies
                                                                  • EU referendum
                                                                    • ATI launches first aerospace technology strategy to help boost productivity and investment
                                                                      • Other factors
                                                                      • UK Turnover

                                                                        • Key points
                                                                            • Figure 13: UK aerospace equipment turnover, 2010-14, (£ billion at MSP)
                                                                            • Figure 14: UK aerospace equipment turnover, 2010-2014, (£ billion at MSP)
                                                                            • Figure 15: UK aerospace equipment turnover, by sector, 2010-14, (£ billion at MSP)
                                                                            • Figure 16: UK aerospace equipment turnover, by sector, 2010-2014, (£ billion at MSP)
                                                                        • Market Trends

                                                                          • Key points
                                                                            • Civil aerospace
                                                                                • Figure 17: Regional analysis of global air passenger traffic development, in RPK, 2011-2015, (% annual change)
                                                                                • Figure 18: Regional analysis of global air passenger traffic development, 2011-2015*, five-year average, (% change in RPK)
                                                                                • Figure 19: Forecast development of the global airline fleet, by aircraft type, 2014 and 2034, (Number of aircraft)
                                                                                • Figure 20: Forecast development of the global airline fleet, by aircraft type, 2014 and 2034, (% of total)
                                                                                • Figure 21: World mainline jet deliveries, by model and manufacturer, 2000, 2011-2014 and partial-year 2015, (Number)
                                                                                • Figure 22: World mainline jet deliveries, by manufacturer, 2000, 2011-2014, (Number)
                                                                                • Figure 23: Large commercial aircraft net orders, 2014 and partial-year 2015, (Number)
                                                                                • Figure 24: Regional aircraft deliveries, by model, 2011-2014, (Number)
                                                                                • Figure 25: Deliveries of business aircraft, by manufacturer, 2010-2014, (Number of aircraft)
                                                                                • Figure 26: Deliveries of business aircraft, 2010-2014, (Number)
                                                                              • Defence
                                                                                  • Figure 27: The UK defence departmental expenditure limits and defence spending, 2010/11-2014/15, (£ million)
                                                                                  • Figure 28: UK defence departmental expenditure limits and defence spending, 2010/11-2014/15, (£ million)
                                                                                  • Figure 29: The UK defence departmental capital expenditure limits, 2011/12-2015/16, (£ million)
                                                                                  • Figure 30: The UK defence departmental cash resource expenditure limits, 2011/12-2015/16, (£ million)
                                                                                  • Figure 31: The UK defence annually managed expenditure limits, 2009/10-2013/14, (£ million)
                                                                                  • Figure 32: MoD equipment expenditure, 2011/12-2015/16, (£ million)
                                                                                  • Figure 33: MoD equipment expenditure, 2011/12-2015/16, (£ million)
                                                                                  • Figure 34: MoD research & development expenditure outturn, 2008/09-2012/13, (£ million)
                                                                                  • Figure 35: UK defence expenditure by industry, 2009/102013/14, (£ million)
                                                                                  • Figure 36: MoD major equipment projects, as at 31 March 2014, (£ million)
                                                                                  • Figure 37: Defence aircraft and spacecraft expenditure outturn in the UK, 2009/102013/14, (£ Million)
                                                                                  • Figure 38: Defence aircraft and spacecraft expenditure outturn in the UK, 2009/10-2013/14, (£ million)
                                                                                  • Figure 39: Forward available fleet by aircraft type for the UK armed forces, 2010-2014, (Number)
                                                                                • PFI
                                                                                    • Figure 40: MoD PFI projects, 2014, (Year and £ million)
                                                                                • International Trade

                                                                                  • Key points
                                                                                    • Overview
                                                                                      • Imports
                                                                                        • Figure 41: UK imports of aerospace equipment, 2010-2014, (£ million at CIF)
                                                                                        • Figure 42: UK imports of aerospace equipment, 2010-2014, (£ million at CIF)
                                                                                      • Segmentation
                                                                                        • Figure 43: Segmentation of UK imports of aerospace equipment, by type, 2010-2014, (£ million at CIF)
                                                                                      • Exports
                                                                                          • Figure 44: UK exports of aerospace equipment, 2010-2014, (£ million at FOB)
                                                                                          • Figure 45: UK exports of aerospace equipment, 2010-2014, (£ million at FOB)
                                                                                        • Segmentation
                                                                                          • Figure 46: Segmentation of UK exports of aerospace equipment, by type, 2010-2014, (£ million at CIF)
                                                                                          • Figure 47: Identified orders of UK exports of defence aircraft and equipment, 2010-2014, (£ million)
                                                                                          • Figure 48: Identified orders of UK exports of defence aircraft and equipment, 2010-2014, (£ million)
                                                                                          • Figure 49: UK aerospace equipment trade balance, 2010-2014, (£ million)
                                                                                          • Figure 50: UK aerospace equipment trade balance, 2010-2014, (£ million)
                                                                                      • Industry Structure

                                                                                        • Key points
                                                                                          • Industry development
                                                                                            • Industry structure
                                                                                              • Figure 51: Analysis of the changes in the structure of the manufacture of air and spacecraft and related machinery industry, 2011-2015, (Number of factories and businesses)
                                                                                              • Figure 52: Analysis of the changes in the structure of the repair and maintenance of aircraft and spacecraft industry, 2011-2015, (£000 and number of companies)
                                                                                            • Structure by employment
                                                                                              • Figure 53: Analysis of the employment structure of the manufacture of air and spacecraft and related machinery industry, 2014 and 2015, (Number of outlets and outlet employment size)
                                                                                              • Figure 54: Analysis of the employment structure of the repair and maintenance of aircraft and spacecraft industry, 2014 and 2015, (Number of outlets and outlet employment size)
                                                                                            • Structure by turnover
                                                                                              • Figure 55: Analysis of the financial structure of the manufacture of air and spacecraft and related machinery industry, 2014 and 2015, (£000 and number of businesses)
                                                                                              • Figure 56: Analysis of the financial structure of the repair and maintenance of aircraft and spacecraft industry, 2014 and 2015, (£000 and number of businesses)
                                                                                          • Company Profiles

                                                                                            • AgustaWestland

                                                                                                  • Figure 57: Financial analysis of AgustaWestland, 2010-2014, (£ Million)
                                                                                                • Company outlook
                                                                                                • Airbus Operations

                                                                                                      • Figure 58: Financial analysis of Airbus Operations, 2010-2014, (£ million)
                                                                                                    • Company outlook
                                                                                                    • BAE Systems

                                                                                                          • Figure 59: Financial analysis of BAE Systems, 2010-2014, (£ Million)
                                                                                                        • Company outlook
                                                                                                        • Cobham

                                                                                                              • Figure 60: Financial analysis of Cobham, 2010-2014, (£ million)
                                                                                                            • Company outlook
                                                                                                            • GE Aircraft Engine Services

                                                                                                                  • Figure 61: Financial analysis of GE Aircraft Engine Services, 2010-2014, (£ million)
                                                                                                                • Company outlook
                                                                                                                • GKN

                                                                                                                      • Figure 62: Financial analysis of GKN, 2010-2014, (£ Million)
                                                                                                                    • Company outlook
                                                                                                                    • GKN Aerospace Services

                                                                                                                      • Lockheed Martin (UK)

                                                                                                                            • Figure 63: Financial analysis of Lockheed Martin (UK), 2010-2014, (£000)
                                                                                                                          • Company outlook
                                                                                                                          • Rolls-Royce

                                                                                                                                • Figure 64: Financial analysis of Rolls-Royce, 2010-2014, (£ Million)
                                                                                                                              • Company outlook
                                                                                                                              • Short Brothers

                                                                                                                                    • Figure 65: Financial analysis of Short Brothers, 2010-2014, (£000)
                                                                                                                                  • Company outlook
                                                                                                                                  • Turbo-Union

                                                                                                                                        • Figure 66: Financial analysis of Turbo-Union, 2010-2014, (£000)
                                                                                                                                      • Company outlook
                                                                                                                                        • Figure 67: Profiled companies’ turnover, 2010-2014, (£ million)
                                                                                                                                    • Forecast

                                                                                                                                      • Key points
                                                                                                                                        • Industry outlook
                                                                                                                                            • Figure 68: Forecast world mainline jet deliveries, by type, 2014-2033 and 2015-2034, (Number)
                                                                                                                                            • Figure 69: Forecast world mainline jet deliveries, by type, 2015-2034, (Number)
                                                                                                                                            • Figure 70: Forecast world airplane fleet, by region, 2014 and 2034, (Number)
                                                                                                                                            • Figure 71: Forecast world airplane fleet, by region, 2014 and 2034, (% of total)
                                                                                                                                          • Business jet market anticipates stable growth
                                                                                                                                            • Other aircraft demand forecasts
                                                                                                                                              • Market drivers for civil aerospace sector
                                                                                                                                                • Government and industry collaboration is keeping the industry at the forefront of strategy development
                                                                                                                                                  • Research and development
                                                                                                                                                    • Largest passenger growth will be seen in emerging markets
                                                                                                                                                      • Global middle-class population growth makes it a key target market
                                                                                                                                                        • Low-cost carriers are becoming more dominant in the industry due to ongoing economic fragility in many regions
                                                                                                                                                          • Airport capacity concerns
                                                                                                                                                            • Replacement aircraft demand to remain a main driver in the development of the civil aerospace market
                                                                                                                                                              • Climate change is driving industry innovation that will benefit both the environment and aerospace companies
                                                                                                                                                                • Air defence equipment forecast
                                                                                                                                                                    • Figure 72: Forecast UK DEL on defence, 2015/16-2017/18, (£ million)
                                                                                                                                                                    • Figure 73: Forecast UK DEL on defence, 2015/16-2017/18, (£ million)
                                                                                                                                                                • Further Sources and Contacts

                                                                                                                                                                  • Trade associations
                                                                                                                                                                    • Trade magazines
                                                                                                                                                                      • Trade exhibitions

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                                                                                                      Aerospace Industry - UK - October 2015

                                                                                                                                                                      £995.00 (Excl.Tax)