Its stalwarts range from household names on whose products much of the world’s population regularly travels to manufacturers of highly specialised equipment from passenger seats to cockpit controls. FlightGlobal’s ranking of the biggest 100 businesses in aerospace is a club that rarely admits new members or dramatically changes its hierarchy.
Aside from the occasional merger or takeover that sees established brands disappear, or – bolstered with another company’s revenues – race up the rankings, the industry’s elite appears chary of outsiders. Scarcely do more than half a dozen debutants make it into the Top 100. Existing members rarely move by more than a few places in the rankings from year to year.
The club is modestly profitable – avoiding, with just four exceptions in this year’s analysis, what might be seen as vulgarly high operating margins of more than 20%. But it is getting more efficient. Although for two years running, overall revenues have barely nudged upwards, there have been double-digit increases in operating returns, suggesting a new fondness for leaning-out rather than fattening-up.
That pressure to deliver greater value and trim costs has come from the top – Airbus and Boeing – and permeated all strata of the industry. Our analysis suggests tier one and larger tier two companies – who make up our Top 100 – have managed to push those demands for lower prices further down the supply chain.
As with the establishment anywhere, power in the Top 100 is skewed to the very top. The largest 20 businesses make more than 82% of the profits, on less than 76% of the sales.
The Top 100 is also largely a gentleman’s club. Just as women are slowly emerging on the flightdeck and in airline boardrooms, so too are they in aerospace, with at least two female chief executives among the companies in our survey, and several more in C-suite roles. However, profiles of senior management teams on most corporate websites and glossy annual reports do little to dispel the stereotype of an industry run by middle-aged, white men, who have risen up the male-dominated professions of engineering and accountancy.
Do not expect to see many technology disruptors or entrepreneurial start-ups on a rapid growth trajectory in the Top 100 any time soon. Aerospace is an industry based on long lead times and high entry barriers. The Top 100 is an agreeable club to be in, but it is never easy to gain admittance.
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Source: FlightGlobal.com
