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Aerospace Resource Guide: United Kingdom

 

United Kingdom Statistics

Summary
Market Entry

Current Market Trends

Current Demand

Main Competitors

Best Prospects
Subsector Focus: Helicopters

Barriers

Trade Events/Associations

CS Contact

Capital: London
Population:
63.7 million
GDP USD
: USD 2.54 trillion
Currency:
Pound Sterling £
Language
: English

Summary

The UK aerospace industry is the second largest in the world behind that of the U.S. Total UK civil aerospace sales in 2013 amounted to USD 20.2 billion, and the sector had a 17% global market share. The UK does not produce any large civil aircraft and 75% of domestic production is exported. The UK has a particular reputation as a global center of excellence for the design and production of wings and aero structures, aero engines and aircraft systems (including landing gear). In addition, the UK has a thriving maintenance, repair and overhaul sector, servicing the huge numbers of military and civil aircraft that fly through and from the UK every year. The aerospace industry is a major market for U.S. exports in the United Kingdom.

Market Entry


Entry or expansion by U.S. companies into the UK aerospace market is challenging for SMEs and OEMs alike. Due to a mature and sophisticated supply chain, a U.S. company can expect to commit both time and resources to enter or expand within the UK aerospace market. The UK supply chain employs some 230,000 people directly and indirectly, ranging from very large companies such as OEMs to small businesses making very specialized components. The aerospace supply chain is well-integrated with the primes who are all looking to reduce the number of their suppliers. Developing and increasing the domestic supply chain is a matter of significant interest to the UK Government, and in 2013 the Department of Business, Innovation and Skills unveiled a USD 20.2 billion initiative to help give a competitive advantage to UK companies in the aerospace market. In addition, through the Aerospace Growth Partnership, UK industry and government have established a collaborative partnership to increase investment in UK innovation, supply chains and engineering skills, with both UK industry and government committing USD 3.5 billion towards the creation of an Aerospace Technology Institute.

Current Market Trends


The expected surge of demand for fixed wing aircraft and helicopters is being led by high-growth economies from Asia, the Middle East and South America. UK aerospace companies are actively seeking opportunities in these high-growth markets as their importance in the global supply chain increases. These markets are expected to account for 58% of new fixed wing aircraft and 45% of rotor craft orders to 2031. With market projections forecasting a requirement for 29,000 new large civil airliners, 24,000 business jets, 5,800 regional aircraft and 40,000 helicopters by 2032, the right prioritization and strategy will be critical in maximizing the opportunities for the UK aerospace industry. Major international OEMs and MRO providers have shifted some activities to these countries or are planning to do so. The UK aerospace sector will also see an increase in the number of partnerships and joint ventures being developed within the sector as organizations seek to shore up their capabilities in new markets. While some of these will be traditional tie-ups between suppliers and integrators, it is expected that there will also be new collaborations forming between the aerospace sector and non-aligned industries such as telecoms or consumer electronics.

Current Demand


The key areas and focus of the UK aerospace market for the foreseeable future include:
Aerodynamics (e.g. wing design)
Propulsion (e.g. rotor blades, engine assembly)
Aero structures (e.g. fuselage & wing assembly)
Advanced systems (e.g. avionics, undercarriage)

Competitors


The UK has a highly developed and competitive aerospace industry in which more than 3,000 aerospace companies operate. There are considered to be 6 prime companies in the UK civil aerospace supply chain, namely Rolls-Royce, Airbus, Spirit Aerosystems, Bombardier, AgustaWestland, and GKN. There are around 10 to 20 Tier 1 companies including Marshall Aerospace, Eurocopter, GE Aviation, Meggitt, Honeywell, UTC Aerospace Systems and Cobham. There are some 100 to 200 Tier 2 companies including Ultra Electronics, Firth Rixson, Gardner Aerospace and RLC Group. There are over 800 Tier 3 companies such as Aeromet, Bromford Industries and Avingtrans.

Best Prospects


With current cost pressures in the global market, and in order to achieve greater visibility within their supply chain, OEMs are further consolidating their supplier networks. As UK aerospace organizations become leaner and more cost-efficient, a growing number will move towards “demand-driven” supply chains where all planning, purchasing and replenishment are aligned with actual demand at the furthest point of consumption. Due to the highly developed and competitive aerospace industry within the UK, U.S. suppliers may want to consider collaborating with a larger customer that has established a presence in the UK, which could thereby provide strategic access to the UK and Europe. U.S. companies should also expect to enter the UK market at a lower tier of the supply chain than they might usually enter in the U.S or globally. Suppliers may also need to consider using a local distributor or agent who has established ties within the market.

Subsector Focus: Helicopters


The UK’s helicopter market is dominated by AgustaWestland and Airbus Helicopters UK.
AgustaWestland directly employs 3,280 people, while supporting a further 10,000 jobs in the supply chain including 650 SMEs, serving both commercial and government customers worldwide. In early 2014, AgustaWestland won two contracts from the UK MOD worth a total of USD 1.25 billion for converting Merlin helicopters for maritime operations to replace Britain's Sea Kings, and to provide support and maintenance for the Apache attack helicopter.

For over 30 years, Airbus Helicopters UK has provided products and services for both the civil and military helicopter markets. With more than 300 civil helicopters customized and delivered in the UK, Airbus Helicopters UK is the leading provider of helicopters in the UK’s civil market with a 45% fleet share, and it dominates the UK security and emergency services market.

Barriers


With such a well-integrated and mature supply chain, new U.S. suppliers must demonstrate a clear competitive advantage if they are to be successful in the UK. With most of the major aerospace manufacturers in the UK looking to simplify their supply chains, there are fewer opportunities to supply and these opportunities will tend to be further down the supply chain. As long as suppliers are compliant with EU regulations/standards, they should not encounter any significant technical barriers to entry.

Trade Events/Associations

Farnborough International Airshow

14-20 July, 2014 | London, UK
www.farnborough.com

A U.S. Department of Commerce Certified Trade Fair and one of Europe’s largest aerospace exhibitions, with 1500 exhibitors from 40 countries of which around 350 exhibitors are from the U.S..

DSEI

15-18 September, 2015 | London, UK
http://www.dsei.co.uk

A U.S. Department of Commerce Certified Trade Fair and one of the world’s largest defense exhibitions with 1,500 international exhibitors from 54 countries including 180 U.S. companies.

Helitech International

22-24 September, 2015 | London, UK
http://www.helitechevents.com/

Projected to be a U.S. Department of Commerce Certified Trade Fair and one of the world’s largest helicopter exhibitions with 230 international exhibitors from 50 countries including 35 U.S. companies.

ADS Group
www.adsgroup.org.uk


British Helicopter Association
www.britishhelicopterassociation.org


U.S. Commercial Service Contact Information:


Mr. PJ Menner
Commercial Specialist
PJ.Menner@trade.gov

+44 (0)20 7894 0470


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