The trend towards outsourcing by the industry’s major airframe manufacturers is accelerating, but the expected consolidation of lower-tier suppliers has yet to happen, says the latest report on the world aerostructures market by UK-based consultancy Counterpoint Market Intelligence.
The amount of work outsourced by primes in 2004 grew by 9%, to 49%, says Counterpoint, although much of this came from the sale of Boeing’s huge Wichita plant, since renamed Spirit Aerosystems, to private equity company Onex. The trend is reinforced by the emergence of competent suppliers in regions where costs are lower, such as eastern Europe, East Asia and South America.
“Overall, the market remains fragmented and a major consolidation phase has yet to happen,” says the report. “We continue to think that consolidation remains likely; the two largest independent players are both owned by private equity companies, so their ownership is inherently volatile.”
Overall, the report names 21 Tier 1 companies, which between them retained in-house work valued at $12.3 billion, in an aerostructures market estimated to be worth $24.2 billion in 2004.
In its previous assessment published a year ago, Counterpoint asserted that the aerostructures market would boil down to around eight dominant “Super Tier 1” suppliers. “Only the eighth position remains to be filled,” it says. By far the largest, with 12% of the market, is Spirit, followed by Vought and Goodrich (7% each), Shorts (5%) and Mitsubishi, Aircelle and GKN, each with 4%.
The Boeing 787, predominately manufactured from composites, has focused attention on the need for suppliers to gear up for automated manufacture of large and small composite components. “Nothing will ever be quite the same again,” says Counterpoint Market Intelligence director, George Burton.
“The consolidation issue is about whether big companies can produce things cheaper than smaller companies. If so, the consolidation happens,” he says.
The report predicts that the Airbus A320 and Boeing 737 replacements “will almost certainly have composite fuselages…and both will be launched sooner than the manufacturers are saying.”
JULIAN MOXON/LONDON
Source: Flight International
