Will Airbus and Boeing raise their single-aisle jetliner production rates to 70 per month? The industry has heard growing talk of these increases, which could come just a few years after the end of the decade. The current state of demand justifies these rates. But the current state of demand is based on an almost perfect confluence of market conditions. Here’s why that might not last.
In terms of units produced over the next 10 years, large turbofans account for 26.3% of the overall aero turbine market. Only turboshafts, at 23.5%, come among the other market segments. But when measured by retail value of engines delivered, the large fan segment is a whopping 67.7% of the total market, far ahead of the next nearest segment, Medium Turbofans, at just over 11%.
This new entrant challenge has induced very different reactions by the two legacy regional jet market leaders. One is reinventing itself to survive, while the other seems content to gradually fade away.
Teal Group’s overall, cumulative forecasts indicate the military electronics market available to U.S. manufacturers will continue to rise slowly, while platform hardware procurements will decline. The shrinkage of new-platform hardware procurements began as long ago as the 1990s (remember the Cold War? The Peace Dividend? Backfire bombers, SS-20 MIRVs and Nuclear Winter?), and has shrunk again more recently after a hardware procurement surge for Iraq and Afghanistan war buys and then after-action refits (ground systems, especially, such as armored vehicles, MRAPS, base security, etc.).
Strategy: Leonardo's management is continuing to work to change the corporate culture and improve the company's performance to reach levels achieved by European competitors. Its new industrial plan unveiled in February 2018 seeks to restart growth, improve financial performance and cut debt.
The business already has been restructured. Cost-cutting and divestitures of non-core businesses have improved profitability.To turn around the company, management has undergone repeated shakeups replacing many long-time managers.
Forecasting the size of the future UAV market is far more problematic, than in other areas of aerospace technology. There are several reasons for this. The most important is that UAVs are a revolutionary new technology. They are not an established technology (such as missiles, combat aircraft, etc.), where there are clearly defined requirements and established bureaucratic organizations that foster their procurement. While there has been a considerable amount of attention to UAVs in the press, and considerable experimentation with UAVs by many armies, there are still an enormous number of unanswered questions about the nature of UAVs and their operation that make any forecasting difficult.
Despite the challenges associated with entering this market, three new regional jet producers have thrown their hats in the ring. The biggest success, and a major surprise, has been the Mitsubishi Regional Jet (MRJ) Powered by Pratt & Whitney’s Pure-Power PW1000G Geared Turbofan, (GTF).
In October 2009, the MRJ scored a notable breakthrough with a tentative order for 50 firm and 50 option planes from Trans States Holdings, the parent company of Trans States Airlines and GoJet Airlines. A firm contract was expected by the end of the year, but did not arrive until February 2011. Also, in July 2012 Sky-West announced a tentative commitment for 100 MRJ90s. This order, for 100 firm and 100 option planes, was firmed up in December 2012.
In terms of units produced over the next 10 years, turboshafts account for 23% of the overall aero turbine market. Measured by value of engines produced, the 'shaft segment is only 4% of the total market.
The joint kings of the turboshaft market are General Electric and French manufacturer Turbomeca, a subsidiary of the Safran Group. The former leads handily in terms of value of units delivered, but they are at parity when unit deliveries are considered.