The years ahead will increasingly see the German aviation industry outsource its capacities in development and production to the Far East. Plant closures loom – especially among the larger corporations in this sector. These are the results published in the Aviation Study 2015. The consulting firm Staufen, together with the German Aerospace Industries Association (“BDLI”), surveyed more than 100 aviation industry enterprises in Germany for this study.
“The growing aviation market in the Far East is leaving these companies no choice. If they want to do business there, then they have to operate under the prevailing local production and development cost structures”, says Harald Knoke, head of the Aviation Unit at Staufen. “Our study shows that the establishment of agency offices in the key markets of Asia is one of the greatest challenges currently faced by these firms.”
The activities of the German aviation industry are therefore focused on China, in particular. China’s state-owned aviation company, Comac, is currently in competition with Airbus and Boeing, with the development of its C919 medium-haul aircraft, which is scheduled to make its maiden flight in 2015. Accommodating up to 170 passengers, the aircraft may go into series production as early as 2016. Germany’s aviation supply industry wants to get in on the act. Apart from China, these companies are also turning their gaze towards India and South America, the home of Embraer. According to the study, the expansion of capacities in these countries is clearly coming at a cost to operating sites in Germany and the rest of Western Europe.
“While the survey may indeed indicate that the Federal Republic will continue to be the most significant location for the German aviation industry, the results are nevertheless concerning for German-based market operators”, says Harald Knoke. “If the intention is to retain capacities in Germany, then both development and production will have to be structured in such a way that the main activities can be kept here. This will only be possible if companies succeed in leveraging areas of efficiency within Germany. This is especially true of tier 1 suppliers – increasingly assuming the system-supplier role for the major aircraft manufacturers – as they are particularly finding that cost arguments play a crucial role in the outsourcing decision.”
In this respect every process, from design to delivery, has to be placed on the test bench.” And the industry is thoroughly aware of this, a fact confirmed by the results of the survey. According to Staufen’s aviation expert, Mr. Knoke, the aim here is to become more flexible, enhance price-efficiency and be faster”. The German aviation industry still has enormous potential in this regard. After all, more than one out of every two companies is failing to implement measures that would create more efficient enterprise structures.
About the survey:
The “Aviation Study 2015 – managing global value-creation chains” is based on a survey conducted by the consulting firm Staufen AG in partnership with the German Aerospace Industries Association (“BDLI”). A total of 103 managers participated from all areas of the German aviation industry: aircraft manufacturers (OEM = Original Equipment Manufacturer), module and parts suppliers (tier 1, tier 2) as well as enterprises in the service sector (MRO = Maintenance, Repair, Overhaul). They expressed their thoughts on the current situation and their expectations for the coming years.
The study (so far only in German. An English version is in progress) can be requested by writing to the following address: marketing@staufen.ag
