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Tue, Feb 20, 2018

Retrofit Avionics Sales Surge More Than 20 Percent Over 2016

Total Year-End Avionics Sales Exceed $2.3 Billion In 2017

The Aircraft Electronics Association has released its 2017 year-end Avionics Market Report.

Total worldwide business and general aviation avionics sales for 2017 amounted to $2,326,852,536.79, or more than $2.3 billion. The figure represented a 2.9 percent increase in sales compared to the previous year as reported by the participating companies in 2016. The increase reverses two-straight years of declining sales and was the first year-over-year increase in sales since 2014.  

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 $2.3 billion in sales in 2017, 42.3 percent came from forward-fit (avionics equipment installed by airframe manufacturers during original production) sales, or more than $984 million. That marked the lowest dollar amount of forward-fit sales recorded in the last five years.

By contrast, the retrofit (avionics equipment installed after original production) market showed an increase in its percentage of total sales for the fifth-straight year, recording an all-time high of more than $1.3 billion in sales in 2017, a 20.1 percent increase over 2016. Retrofit sales amounted to 57.7 percent of sales in 2017.

According to the companies that separated their total sales figures between North America (U.S. and Canada) and other international markets, 73.5 percent of the 2017 sales volume occurred in North America (U.S. and Canada), while 26.5 percent took place in other international markets.

Sales during the fourth-quarter months of October, November and December in 2017 were just shy of $600 million, up slightly compared to the 2016 fourth-quarter sales with a 0.3 percent increase.

"The sales growth in the retrofit market is the obvious headline for the year," said AEA President Paula Derks. "With more than a 20 percent increase in sales, the retrofit market may be positively impacted due to an uptick in the aircraft equipage rate ahead of the FAA's 2020 deadline for ADS-B Out avionics. The retrofit surge also could be partially attributed to the possibility that aircraft owners are choosing to have additional avionics work done while simultaneously coming into ADS-B compliance. Many avionics shops are telling us that aircraft owners are electing to order full-panel avionics upgrades rather than just the ADS-B equipment. It will be interesting to see whether the retrofit market continues to grow significantly in the next two years as the mandate draws closer."

The 2017 year-end totals do not exactly equal the sum of the four quarterly amounts as reported earlier in the year. This variance is the result of seasonally adjusted year-end numbers by some of the participants. In addition, the number of companies that participate in the AEA Avionics Market Report may change on a quarterly and/or annual basis. This may occur due to mergers and acquisitions during the year along with new companies participating in the reporting process. Any comparative analysis of the data should take this variance into consideration.

(Source: AEA)

FMI: www.aea.net/marketreport


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