But Not Until Aircraft Production Picks Up
With the AEA convention in Reno peeking over the horizon, new
analysis from Frost & Sullivan finds that the commercial
avionics market earned revenues of $6.67 billion in 2009, and
estimates this to reach $8.64 billion in 2014. That after a dip in
revenues in 2009 and 2010. The negative effect of the economic
downturn and the high prices of fuel on the transport aircraft
market mirrored itself in the business aircraft and the general
aviation aircraft markets. While aircraft transportation production
declined by 4 percent in 2010, business and general aviation
aircraft production experienced a 40 percent cut in 2010. This
slowdown comes after years of record aircraft production and will
put the brakes on avionics manufacturing.
The retrofit and aftermarket sales in previous years had
resulted in unprecedented profits for avionics manufacturers.
However, currently, they have to streamline their operations and
investigate niche markets to stay afloat. Manufacturers in both the
air transport and business aircraft markets can weather this
turbulent phase if there are only limited cancellations or
deferrals of orders.
Although manufacturers will be hard hit by the dip in production
for the next five years, the growth in the individual parts of
integrated modular avionics (IMA), glass cockpits and enhanced
awareness devices will go a long way in helping them keep their
heads above water.
For instance, both 787 and A350 use IMA, opening up a new window
of opportunity for component manufacturers. Glass cockpits are also
finding considerable uptake among new air transport aircraft and is
becoming a regular fitting in new business and general aviation
aircraft.
"Glass cockpits are now the standard, even in piston aircraft,"
says Frost & Sullivan research analyst Wayne Plucker. "Enhanced
vision systems, synthetic visions systems and heads-up displays are
also making inroads into the market."
Avionics manufacturers have to rely on newer technologies to
provide growth opportunities until aircraft production starts to
recover. Older aircraft could need significant hardware changes to
comply with the 2020 U.S. implementation date of the Automatic
Dependent Surveillance-Broadcast (ADS-B) and the related Required
Navigation Performance programs.
"As the air transport market is likely to experience lesser
contraction and a quicker recovery, manufacturers in that market
space will be well positioned for growth after five years," notes
Plucker. "Manufacturers that develop newer technology systems are
likely to find novel applications that traditional suppliers
cannot."