US Aerospace Industry and Boeing's Standing

One of the aerospace majors in the United States (US) is the Boeing Company that is virtually the pillar of strength for the US aerospace industry

Issue: 5 / 2018By Air Marshal B.K. Pandey (Retd)Photo(s): By Boeing

The regime of aerospace industry is one area in which the United States (US) has held for quite some time and continues to hold a dominant position in the world. With high degree of command and control over modern technologies, most of which has been developed indigenously, as well as the ongoing continuous advancement in this domain, the US aerospace industry enjoys significant competitive advantage over those of other technologically advanced nations of the world. Today, the US is undoubtedly the leading innovator in the world and producer of technologically advanced products. Like other developed nations especially in Europe, the aerospace industry of the US is a high technology capability that is being fully exploited by the nation for the original design, development and manufacture of both civil and military aircraft, the aero engines to power these platforms, guided missiles, space vehicles and all components related to these required by the users.

A BRIEF OVERVIEW

The US aerospace industry consists of around 300 large, medium and small companies. However, the leading companies in the US aerospace industry today who are also the major players on the global scene are Boeing, United Technologies Corporation (UTC), Space Exploration Technologies Corporation also referred to as SpaceX, Norththrop Grumman, General Dynamics, GE Aviation, Raytheon and Lockheed Martin Corporation. The US aerospace market being the largest in the world, has a skilled, well trained and competent work force, wide range of products on offer, elaborate distribution systems and strong support at the local and national level for policy formulation and promotion of products. The US aerospace industry employs more than 5,00,000 personnel in scientific and technical regimes across the nation and supports more than 700,000 jobs in related fields. Investment in the US aerospace industry is facilitated by a large pool of well-trained machinists, aerospace engineers and other appropriately skilled work force with the right level of experience in the aerospace industry. Some of the major sub-sectors of the US aerospace industry are as under:

  • Large Civil Aircraft. The US is a global leader in the production of large civil aircraft and offers numerous opportunities for investment in the supply chain.
  • Rotorcraft. The US rotorcraft industry is diverse with the market encompassing the military aviation segment, emergency medical service providers, offshore oil and gas exploration and law enforcement applications.
  • General Aviation (GA). The US is the world’s largest market for GA aircraft. Manufacturers of GA aircraft produce a wide range of platforms including piston engine aircraft, turboprops, jets, balloons, dirigibles and experimental aircraft.
  • Engines. Major engine manufacturers produce engines for both civil and military aircraft, either by themselves or as part of one or more joint ventures. This sub-sector also provides business opportunities in maintenance, repair and overhaul of their products.
  • Unmanned Aircraft Systems (UAS). Given the rapid growth of UAS operations both in the military and civil regimes, there is immense potential for the US aerospace industry in this sub-sector.

THE CIVIL AVIATION INDUSTRY

Companies in the US that are engaged in manufacturing activities in the civil segment of the aerospace industry, are heavily dependent on sales to the airline industry not only in the US which by itself is very large, but on the airline industry of other nations the world over. With the underlying drivers of demand in the global airline industry being very strong, there is an ever increasing demand for air travel all over the world. As a result, there has been a corresponding surge in demand for new commercial aircraft with more advanced technologies as well as higher levels of fuel efficiency leading to a healthy growth in the sales of commercial and business aviation platforms and other related products.

In the domain of civil aviation, the US currently accounts for just over 50 per cent of the total global production. Admittedly, in the present times, there has been some reduction in the share of the US aerospace industry in the civil aviation segment of the global market when compared with that prevailing in the decade of the 1980 and the 1990s. In these two decades gone by, the US aerospace industry commanded a more dominant position with the global market share being close to 70 per cent. The present reduction has been due to the rise of European aerospace major Airbus as well as the Brazilian aircraft manufacturer Embraer as also a degree of consolidation at home with the merger of McDonnell Douglas with Boeing in 1997. As it stands today, North America and Europe account for around 80 per cent of global production in the domain of the civil aviation industry.

MILITARY SEGMENT OF THE US AEROSPACE INDUSTRY

Those firms in the US aerospace industry that are associated with the manufacture of aircraft or equipment for the military segment or for organisations related to space exploration namely the National Aeronautics and Space Administration (NASA), are dependent largely on the domestic market. This market is dominated largely by the US government with the Department of Defence and NASA being the two largest consumers of aerospace technology and products. Also, unlike in the case of the global civil aviation market, the demand for products in the military segment in the market outside the US is relatively lower and its customer base is limited generally to strategic defence partners, allies or nations friendly to the US. When compared with the commercial segment of the aerospace industry, the defence industry segment of the US aerospace industry commands a more dominant position with US based companies garnering around 60 per cent of global military sales. One of the aerospace majors in the US is the Boeing Company that is virtually the pillar of strength for the US aerospace industry.

THE BOEING COMPANY

As the world’s largest aerospace company, Boeing is undoubtedly the leading player in the US aerospace industry. It is the leading manufacturer of commercial airliners, defence, space and security systems as well as it is the service provider of aftermarket support. The company recorded an annual turnover of $94,571 million in the year 2016, nearly twice that by the US aerospace giant that is next in line. The Boeing Company consists of three business units namely Boeing Commercial Airplanes, Boeing Defence, Space & Security and Boeing Global Services. The last of the three units commenced operations only on July 01 last year. Supporting the three business units is Boeing Capital Corporation, a global provider of financing solutions. Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defence systems, launch systems, advanced information and communication systems as well as performance-based logistics and training.

In the domain of civil aviation, the US currently accounts for just over 50 per cent of the total global production

Boeing Commercial Airplanes has been the leading manufacturer and exporter of commercial airliners for decades. The company supports airlines who are its customers, in more than 150 countries. Today, this wing of the company manufactures a large number of models such as the Boeing 737, 747, 767, 777 and 787 families of narrow and wide body airliners and a range of Boeing Business Jets. More than 10,000 Boeing-built commercial airliners are in service all over the world which accounts for almost half the global fleet. Products currently under development include the Boeing 787-10 Dreamliner, the 737 MAX and the 777X. The company also offers the most complete family of freighters and about 90 per cent of the world’s air cargo is carried onboard freighter aircraft from Boeing.

Boeing Defence, Space & Security (BDS) is a diversified, global organisation providing leading solutions for the design, development and production of both fixed and rotary wing platforms for military use and projects related to space exploration by humans. Some of the products that is of interest to the Indian Air Force (IAF) are the KC-46 flight refuelling aircraft based on the Boeing 767 commercial airliner platform, the AH-64E Apache attack helicopter and the CH-47F Chinook heavy-lift helicopter. Contracts for the two rotary wing platforms i.e for 22 AH-64E Apache attack helicopters and 15 CH-47F Chinook heavy-lift helicopters have already been concluded and these platforms are expected to be delivered to the IAF in the near future effecting a qualitative upgrade in the operational capability of the IAF.

Boeing Global Services delivers innovative, comprehensive and cost-competitive service solutions for the customers of products from Boeing. With engineering, digital analytics, supply chain and training support spanning across both the government and commercial service offerings, the unmatched, round-the-clock support provided by Boeing Global Services, helps sustain operations by commercial aircraft at high efficiency levels and mission assurance.