Total Year-End Sales Exceed $2.2 Billion In 2016, But Down From Previous Year

The Aircraft Electronics Association has released its 2016 year-end Avionics Market Report, and the news was not good. The report shows total worldwide business and general aviation avionics sales for the year amounted to $2,261,534,820, or more than $2.2 billion. The figure represented a 6.4 percent decrease in sales compared to the previous year as reported by the participating companies in 2015. It was the lowest dollar amount of reported sales since 2012, which was the first year the AEA began tracking sales.

The dollar amount reported (using net sales price, not manufacturer's suggested retail price) includes: all business and general aviation aircraft electronic sales -- including all component and accessories in cockpit/cabin/software upgrades/portables/certified and noncertified aircraft electronics; all hardware (tip to tail); batteries; and chargeable product upgrades from the participating manufacturers. The amount does not include repairs and overhauls, extended warranty or subscription services.

Of the more than $2.2 billion in sales in 2016, 50.6 percent came from forward-fit (avionics equipment installed by airframe manufacturers during original production) sales, or more than $1.14 billion. That marked the lowest dollar amount of forward-fit sales recorded in the last four years.

By contrast, the retrofit (avionics equipment installed after original production) market showed an increase in its percentage of total sales for the fourth straight year. Retrofit sales amounted to 49.4 percent of sales in 2016, while the retrofit market accounted for 49.1 percent of total sales in 2015; 48.6 percent of total sales in 2014; and 45.9 percent of total sales in 2013.

According to the companies that separated their total sales figures between North America (U.S. and Canada) and other international markets, 66.3 percent of the 2016 sales volume occurred in North America (U.S. and Canada), while 33.7 percent took place in other international markets.

"It is disappointing that total worldwide sales have decreased in each of the last two years," said AEA President Paula Derks. "However, we did see some progress made in the fourth quarter. This marks the second straight year where the fourth quarter was the strongest period for sales, so it will be interesting to observe whether those late-year surges continue into future years. We are also seeing an increasing amount of sales taking place in the retrofit market, which increased its percentage of total sales for the fourth straight year. In fact, the fourth quarter of 2016 was only the second quarterly period where the majority of sales took place in the retrofit market."

(Source: AEA news release)

FMI: www.aea.net/marketreport