Strategic partnerships will be key differentiator in a highly consolidated market, finds Frost & Sullivan's Aerospace team
LONDON, Aug. 31, 2017 /PRNewswire/ -- With NextGen and SESAR set for completion this decade, the global commercial avionics market is undergoing a transition from a ground-based system to a satellite-based air traffic control system and is headed towards more compute-intensive, high-speed, and high-bandwidth avionics. Growth is augmented by an increase in aircraft orders, need for real-time data for enhanced flight operations and improved decision making, and implementation of avionics systems for next-generation aircraft/regulatory requirements. To succeed in a highly consolidated market, players should build strategic partnerships.
Frost & Sullivan's research, "Global Commercial Avionics Market, Forecast up to 2030," finds that the total commercial avionics market was worth $12.74 billion in 2016 and is expected to reach $16.65 billion by 2030. The study highlights industry challenges, growth drivers and restraints, and major avionic contracts. The impacts of emerging avionics markets such as China, India, and Russia are analyzed, and a list of home-grown suppliers is provided. It also features market share analysis of major players like Rockwell Collins, Cobham Plc, GE Aviation, Honeywell Aerospace, Garmin International, Thales Avionics, L-3 Communications, Esterline Technologies Corporation, Safran, SAAB Group, Aviation Industry Corporation of China (AVIC), Elbit Systems, BAE Systems, and Meggitt PLC.
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"With 38,200 commercial and business aircraft expected to be delivered between 2017 and 2030, the line-fit market offers new growth opportunities for avionics suppliers," said Frost & Sullivan Aerospace Research Analyst Priyanka Chimakurthi. "A shift toward Internet of Things (IoT) will also affect avionics suppliers. Through sensorization, new platforms will be able to record and deliver important sets of data that will lead to major changes in how modern aircraft are maintained and repaired."
Strategic imperatives for success and growth include:
- Continued product development through consistent investment in research and development (R&D), and active participation in joint R&D programs;
- The need for suppliers to diversify into business intelligence data platforms and analytic solutions in order to complement shipset sales and take advantage of IoT opportunities;
- Large avionic suppliers require a strategic acquisition program to shortlist and evaluate targets due to intense industry consolidation;
- A focus on the development of value packages and innovative maintenance, repair and operations (MRO) solutions, capturing both out-of-warranty and end-of-service platforms.
"Big aircraft integrators are following a low-risk strategy, investing in platform redevelopment programmes—for example, A320 Neo, B737 Max, and B777X—rather than clean sheet aircraft. This presents a huge barrier to entry for new players, as well as limits cross-platform expansion opportunities for incumbents," noted Chimakurthi. "Furthermore, fluctuations in oil prices, regional conflicts and global economic uncertainty stemming from unexpected events like Brexit have an impact on both airline profitability and the avionics supply chain."
Global Commercial Avionics Market, Forecast up to 2030 is part of Frost & Sullivan's Aerospace Growth Partnership Service program.
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SOURCE Frost & Sullivan