The Global Aerospace

Industry
Size & Country Rankings

16 July 2018
Aerospace is one of the world’s most important industries, yet there
is no consensus on its size and composition

The best industry data is kept by national industry associations...yet

their definition of “aerospace” varies

Some associations include non-aerospace, defense and security. It is

unclear that out-of-country activities are excluded from estimates. It is
also unclear that civil and military operator MRO data is included.

This joint assessment from Aerodynamic Advisory and Teal Group

includes sub-tier supply chain activities and MRO

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 AeroDynamic Advisory and Teal Group created an independent
global aerospace industry size estimate based on a clear definition…
Aerospace Industry Definition
The aerospace industry includes all in-country activities
pertaining to the development, production, maintenance and
support of aircraft and spacecraft

Included in Definition Excluded from Definition

Aircraft manufacturing* Airline operations
Space manufacturing* Satellite broadcasting services
Missile & UAV manufacturing* Defense - ground, maritime, C4ISR
Airborne defense electronics Non-aerospace defense electronics
Simulator & ground support equip. Training services
MRO - transport aircraft Induced economic activity in other sectors
MRO - military aircraft
MRO - BGA aircraft
Research & development

* includes engines, systems, aerostructures & subtier suppliers

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 …and followed a four-step process to standardize national
aerospace industry estimates

1 2 3 4
Collect national industry Subtract non-aerospace Add activity not included Add estimated activity for
association baseline data and out-country activities in industry association countries lacking an
data industry association
and/or verifiable data

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The assessment includes sub-tier supply chain activities and a full
accounting of maintenance, repair and overhaul (MRO) activity
Aerospace Manufacturing Supply Chain Structure Maintenance, Repair & Overhaul + Upgrades

Aircraft Aeroengine Third-party MROs

OEMs OEMs, Operators
OEMs OEMs

Systems & Modules & Major

Tier 1 Major Structures Components Service Parts & Specialist Repairs
Material

Tier 2 Parts & Assemblies Parts & Assemblies

▪ “Wrench-turning” MRO activities and upgrades
conducted by MROs, OEMs and operators are
worth $160-170 billion in civil and military sectors
Tier 3 Make to print parts & components
▪ There is another $60 billion in service (spare)
Raw materials, forgings, castings, extrusions & parts, material and specialty repairs consumed in
Tier 4 hardware MRO “wrench turning”

Source: AeroDynamic Advisory & Teal Group 5

 The global aerospace industry is worth $838 billion; OEMs and sub-
tier manufacturers comprise 54% of all activity
2017 Global Aerospace Industry
▪ Civil and military aircraft and engine
Other OEMs and their extended supply chains
7% account for nearly half of the global
Missiles & UAVs aerospace economic activity
5% Aircraft & Engine
OEMs
Satellites & Space 28% ▪ Maintenance, repair, overhaul, and
7% upgrades generated 27% (just over
$200B) in economic activity

▪ Other activity, including simulator

Total: $838 B manufacturing, defense electronics not
otherwise captured, and research
Civil & Military MRO & performed by government or non-profit
Upgrades associations accounts for just over 7%
27% of activity

Aircraft Systems & Component

Manufacturing
26%
Source: AeroDynamic Advisory & Teal Group 6
 The US accounts for 49% of the global aerospace industry
2017 Global Aerospace Industry - $838 Billion

▪ The US boasts deep and broad civil and military

aerospace clusters, and accounts for half of all
aerospace activity

▪ France has the second largest industry, followed by

China, the UK and Germany

▪ The Americas is the largest region (54%), followed

by Europe, Middle East, & Africa (31%) and Asia-
Pacific (15%)

Source: AeroDynamic Advisory & Teal Group 7

 The Top Ten countries comprise 87% of the global industry
2017 Global Aerospace Industry – Top 10 Countries

Ranking Country Industry Size ($B) ▪ The aerospace industries of the top ten countries
are worth $731 billion – 87% of the global industry
1 United States $408.4
2 France $69.0 ▪ The United States comprises almost 49% of the
world aerospace total, more than the next 25
3 China $61.2 countries combined
4 United Kingdom $48.8
5 Germany $46.2
6 Russia $27.1

7 Canada $24.0

8 Japan $21.0

9 Spain $14.4
10 India $11.0

TOTAL $731B

Source: AeroDynamic Advisory & Teal Group 8

The US and France alone make up 57% of the global aerospace
industry total
#1: United States - $408.4 B #2: France - $69.0 B

▪ High and rising defense procurement budgets ▪ Second only to US as airframer; remarkable track
ensure military segment growth into next decade record as aeronautical leader; very high ratio of
▪ Share of total world aircraft output value at 50% exports. Second only to US as components,
with upward direction with F-35, 787 avionics, and other subsystems provider, too

▪ Extremely strong trade position reflects export ▪ Last country in Europe with true combat aircraft
market dominance in most key segments self-sufficiency; Rafale success helping with
(exceptions: second place in single aisle jets, and broader military standing, and future
no regional aircraft market position) development prospects

▪ Biggest civil airframer (Boeing), biggest military ▪ Extremely diverse exposure to Jetliner, combat,
airframer (Lockheed Martin), biggest engine OEM business aircraft, rotorcraft, space, and missiles
(GE), and biggest systems OEM markets
(UTAS/RC). Very high level of space systems ▪ High level of government support for new product
innovation and development. development and export sales
▪ World leader in UAVs, by any measure: dollar ▪ Big weakness: Airbus twin aisle market
volume, variety of systems, technology uncertainty, A380 uncertainty

Source: AeroDynamic Advisory & Teal Group 9

China now boasts the third largest national aerospace industry and
continues to grow
#3: China - $61.2 B #4: UK - $48.8 B

▪ Continued focus on copying Western jetliner designs and ▪ Very high ratio of exports to domestic
building existing Western jetliners in-country. consumption; heavy presence on US and
▪ Lowest percentage of export sales of any top ten European platforms. Special Relationship with US
aerospace producer; minimal presence on Western still key.
platforms.
▪ Exiting role as military prime (civil prime status
▪ Efforts to replicate Western vertical supplier bases for
abandoned over a decade ago); world leading role
indigenous development programs represent a very
expensive and risky approach to industry development. as risk-sharing partner.
▪ Historical focus on building, replicating, modifying, and ▪ Increasing defense procurement without domestic
sustaining Russian fighters; now shifting towards content a concern.
experimental stealth fighters (J-20, J-31) and new
indigenous military aircraft (Y-20).
▪ Big questions: trade relations with Europe (and
the world) post-Brexit; access to Europe-wide
▪ Overall, very high levels of expenditure and employment;
programs and development funding
very low levels of productivity, output, and profit.
▪ Third largest aerospace industry but largest aerospace ▪ Very high ratio of aftermarket and sustainment
trade deficit in the world work relative to new-build.
▪ Despite these problems, China on par to be largest jetliner ▪ Extensive global holdings and work by UK
market in the world, with very high resources and companies not in our numbers.
tremendous talent.

Source: AeroDynamic Advisory & Teal Group 10

Germany and Russia together account for $73 billion of the $838
billion total
#5: Germany - $46.2 B #6: Russia - $27.1 B

▪ Growing Airbus single aisle facility in Hamburg; ▪ Very high ratio of military to civil work; attempting
A320 added to portfolio this year a civil comeback with MS-21 and CR929
▪ Very high ratio of exports ▪ High ratio of exports to domestic use
▪ Low defense spending damaging ▪ Two key export markets at risk; China moving
competitiveness and sustainment work towards indigenous developments, India moving
▪ Highly innovative subsystems and manufacturing towards Western aircraft
technology development aided by strong R&D ▪ Other export markets highly problematic (Libya,
funding Algeria, Syria) or Former Soviet Union
▪ High level of international partnerships; ▪ Risky model of using intellectual property as
considerable work performed elsewhere and not contribution towards Joint Ventures. FGFA with
in our Germany total India seems to have gone wrong; CR929 with
▪ Tornado replacement, next-generation combat China at risk too
aircraft will play large roles in determining
industry’s future direction; cooperation with
France (rather than UK) may be problematic

Source: AeroDynamic Advisory & Teal Group 11

 Canada and Japan have similar sized aerospace industries
#7: Canada - $24.0 B #8: Japan - $21.0 B

▪ High level of vertical domestic content on

▪ Historic willingness to pay much higher prices for
Bombardier platforms; this has created deeper
defense platform domestic assembly and content
national risk
▪ F-35 acquisition represents a return to off-the-
▪ Transition from failed Bombardier C Series to
shelf fighter acquisition…if that’s the future,
potentially successful Airbus A200 may threaten
domestic design work is at risk, and F-3 won’t
national aero output if Airbus moves work
happen
▪ Positive: Bombardier now able to prioritize and
▪ However, C-2 and P-1 represent very ambitious
restore strong business jet market position
new platforms; export markets highly uncertain
▪ Negative: Highly uncertain future for Bombardier
▪ Commercial supplier business very important;
regional platforms
biggest source of US aerostructures imports
▪ Pratt & Whitney Canada remains second most
▪ Periodic efforts to create civil platforms generally
important company, with strong growth prospects,
fail; MRJ hanging in balance
followed by Bell Helicopter; many successful
smaller providers
▪ Low defense budget a concern; limited defense
market exposure. F-35 work at risk with RCAF
fighter decision

Source: AeroDynamic Advisory & Teal Group 12

While both in the Top Ten, Spain and India only account for 1% each
of the global total
#9: Spain - $14.4 B #10: India - $11.0 B

▪ Large number of small and mid-sized supplier ▪ Difficult and uncertain transition from autarky and
companies with emphasis on composites, state-owned companies to private sector firms
subsystems, and space systems aiming at global partnerships
▪ Relatively low percentage of work performed out ▪ Difficult and uncertain transition from indigenous
of country; strong levels of foreign investment platforms to Western systems
▪ Last Spanish-designed and built production ▪ High level of failure, risk, and uncertainty with
aircraft, Airbus’s C-295, still selling in modest indigenous platforms
numbers ▪ Gradual, tentative move away from Russian
▪ Future direction uncertain with dependence on platforms; FGFA abandonment may be a
dwindling A400M output, national Eurofighter line watershed moment
▪ Very high potential due to large commercial
market, very high defense spending, and strong
local talent

Source: AeroDynamic Advisory & Teal Group 13

 The next ten countries are headlined by Israel, Mexico and Italy
2017 Global Aerospace Industry – Countries 11-20
Ranking Country Industry Size ($B)
11 Israel $10.3 ▪ Israel’s aerospace industry is dominated by Israel
Aerospace Industries (IAI) a government owned
12 Mexico $9.5 company involved in everything from commercial and
military aircraft to missiles, drones and avionics
13 Italy $9.2
14 Brazil $7.2 ▪ Fast-rising Mexico boasts hundreds of low cost
15 Singapore $7.2 fabrication facilities

16 South Korea $6.9 ▪ Embraer and its local supply chain comprises most of
17 Netherlands $4.6 Brazil’s total

18 Australia $4.5 ▪ While the aerospace industries of most countries in

Western Europe are focused on fixed wing air
19 Turkey $4.2
transport aircraft, a large portion of Italy’s aerospace
20 Malaysia $3.7 industry is dedicated to rotary wing aircraft

TOTAL $67.3B

Source: AeroDynamic Advisory & Teal Group 14

 The next ten largest countries have industries worth $26 billion
2017 Global Aerospace Industry – Countries 21-30
Ranking Country Industry Size ($B)
21 Belgium $3.6 ▪ Belgium has both aerospace manufacturing and some
MRO, although most of the former Sabena Technics,
22 Taiwan $3.2 which was affiliated with the Belgian airline Sabena, is
based in Bordeaux, France
23 Sweden $3.1
24 UAE $2.9 ▪ Thailand’s aerospace industry is primarily focused on
25 Switzerland $2.5 sub-tier component manufacturing, raw material
production, and MRO activity
26 Indonesia $2.3

27 Thailand $2.2 ▪ Although Ireland is one of the world’s largest aircraft

leasing hubs, this activity is considered aviation
28 Austria $2.1 rather than aerospace and is not included in the total

29 Norway $2.0
▪ Indonesia has ambitions to grow an indigenous
30 Ireland $2.0 aircraft OEM industry

TOTAL $25.9B

Source: AeroDynamic Advisory & Teal Group 15

 Saudi Arabia, Portugal and South Africa headline the next ten
countries which total $12 billion
2017 Global Aerospace Industry – Countries 31-40
Ranking Country Industry Size ($B)
▪ Countries 31-40 are primarily focused on MRO and
31 Saudi Arabia $1.9 low-cost manufacturing
32 Portugal $1.9
▪ Eastern European countries like Poland and Czechia
33 South Africa $1.8 are hubs for airframe MRO and low-cost sources for
34 Philippines $1.6 the engine supply chain

35 Poland $1.3
▪ Morocco has more than 100 aerospace facilities
36 Morocco $1.1 focused on aerostructures, components and wire
harnesses
37 Czechia $0.90

38 Finland $0.80

39 Greece $0.62
40 Denmark $0.47

TOTAL $12.4B
Source: AeroDynamic Advisory & Teal Group 16
The aerospace industries of #41 – #45 countries are worth $1.5 billion
2017 Global Aerospace Industry – Countries 41-45
Ranking Country Industry Size ($B)
41 Tunisia $0.43 ▪ Tunisia is a growing low-cost source for European
OEMs
42 Romania $0.39
43 Hungary $0.33 ▪ Hungary has a growing aerospace cluster with over
130 companies
44 New Zealand $0.22
45 Chile $0.15
TOTAL $1.5B

Source: AeroDynamic Advisory & Teal Group 17

 Thank you for your attention!

www.aerodynamicadvisory.com www.tealgroup.com

Source: AeroDynamic Advisory & Teal Group 18

 Presenter Biographies
Richard Aboulafia
Richard Aboulafia is Vice President of Analysis at Teal Group. He manages consulting projects in the commercial and military aircraft field and analyzes broader
Vice President – Research defense and aerospace trends. He has advised numerous aerospace companies, including most prime and many second- and third-tier contractors in the US,
The Teal Group Europe and Asia. He also advises numerous financial institutions on aerospace market conditions.
[email protected] Richard writes and edits Teal Group's World Military and Civil Aircraft Briefing, a forecasting tool covering over 135 aircraft programs and markets. He also writes
publicly about aviation and defense, with regular columns in Aviation Week and Space Technology and at Forbes.com. His articles have also appeared in the Wall
Street Journal, Slate, AIAA's Aerospace America, the Financial Times, Professional Pilot, and other publications.

Frequently cited as an aviation industry authority by trade and news publications, Richard has appeared on numerous television news and radio programs
including ABC, BBC, Bloomberg, Reuters, CBS, CNN, NBC, NPR and PBS. He has spoken at numerous conferences, and presents a yearly lecture to the Eisenhower
School for National Security and Resource Strategy Industry Study program.

Before he joined Teal Group in 1990, Richard analyzed the jet engine market at Jane's Information Group. He has a Masters degree in War Studies from King’s
College, University of London and a Bachelors degree from George Washington University.

Kevin Michaels Kevin Michaels is Managing Director of AeroDynamic Advisory, a specialty consulting firm focused on the global aerospace and aviation industries. He has 31
Managing Director years of experience, including hundreds of consulting engagements for leading aviation and aerospace companies across the globe.

AeroDynamic Advisory Kevin is a globally recognized expert in the aerospace manufacturing and MRO sectors, and has significant expertise in business-to-business marketing, customer
[email protected] satisfaction, M&A advisory, technology assessment, cluster development, and strategic planning. His experience spans all major market segments, including air
transport, business & general aviation, and military.

Previously, Dr. Michaels was a Vice President with ICF International’s Aerospace & MRO consulting practice from 2011 - 2016. He was a co-founder and partner
with AeroStrategy from 2001-2011, until its acquisition by ICF. Dr. Michaels was also the Director of Strategic Development with Rockwell Collins Government
Systems, and Principal with The Canaan Group, an aerospace consultancy. He began his career as a project engineer with Williams International.

Dr. Michaels holds BS - Aerospace Engineering and MBA degrees from the University of Michigan, and MSc and PhD degrees in International Relations from the
London School of Economics.

He is a contributing columnist to Aviation Week & Space Technology and chairs the advisory board of the University of Michigan’s Aerospace Engineering
Department. In 2016, he joined the Board of Directors of aircraft parts distributor Proponent..

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