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."

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