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Climbing to Class "A" Airspace

aerospace-industry-outlookHeadwinds seem to be part of every country's flight plan in 2012 and 2013. Global economic growth for 2012 was disappointing at 2.2% and 2013's final GDP tally is not expected to be stronger.  Europe and the U.S. continue to struggle with economic policy, the former flirting with recession and the latter with a weak recovery. Economic growth in China, India and Brazil slowed down and other emerging economies, including Mexico, are following suit as 2013 ends.

Fortunately, most analysts predict that global growth in 2014-2015 will be above 3% and that the aviation industry of the world will continue to grow annually at 5% or more powered by the emerging economies of Asia Pacific, the Middle East and Latin America with their growing consumer demand and international trade.
Mexico continues to gain altitude in the global aerospace industry by strengthening its supply chain and moving up in product complexity. In less than a decade of operations, many of the key players such as Honeywell, Safran, Bombardier, Zodiac, Cessna, Beechcraft and others are already into their third, fourth or higher plant expansion phases, some even including important design and engineering capabilities.

Mexico's competitiveness will help it to improve its position in the global industry, which Boeing is forecasting to be about US$4.8 Trillion in the next 20 years for commercial aviation alone (Jets over 30 seats), representing over 35,000 new airplanes.

And if you consider the defense market, estimated to be about three to four times the size of the commercial segment, plus the private, general aviation market, you are talking about a total aircraft market worth well over US$20 Trillion during 2013-2032. That is US$20 plus 12 zeros in 20 years, or about US$2.7 Billion per day! The pie is enormous and Mexico is contributing with parts, components and subassemblies to all the aircraft market segments.

For example, according to FEMIA (Mexico's Aerospace Industry Association), the number of OEM suppliers with operations in Mexico include 36 for Airbus, 26 for Boeing, 13 for Bombardier and 17 for Embraer.

To put things in perspective, Mexico currently supplies about two days worth of value of the global aviation market, or about one half of one percent. Evidently, the potential for growth is significant. In this article, we will review the current and future conditions of the aerospace industry in Mexico and the trends and challenges that are shaping the outlook of this exciting industry through 2020.

DEVELOPMENT

As shown in Mexico's Aerospace Industry Main Projects Time-Line in Exhibit #1, the history of Mexico's manufacturing aerospace sector is relatively recent and very dynamic.

To read full Outlook please contact
aerospace-industry-outlook-development

Source: Mexico Now Bulletin

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