Global aircraft manufacturers’ revenue up 9pc

By Philip Mwakio

Kenya: The revenue of global commercial aircraft manufacturers increased 8.9 per cent in 2013, according to a Deloitte analysis of the top 100 global aerospace companies.

The report says industrial metrics including production output of 1,274 aircraft; net sales of 2,858 orders, a backlog of nearly eight years of production and revenues totaled about $105 billion (Sh9.3 trillion) — contributing to the sector’s record performance.

According to the report, key drivers of new commercial aircraft requirements were increased travel demand especially in the Middle East, India and China,  and the replacement of obsolete aircraft with new fuel-efficient models.

The analysis found that aircraft production levels in 2013 were 31 per cent higher than 2010 and were more than twice the production levels experienced 10 years ago. “In the absence of  global recession, the record levels of commercial aircraft production are expected to continue, with announced rate increases and new model introductions over the next years,” said Tom Captain, vice chairman, Deloitte LLP.

 Profitability increased 16.3 per cent in 2013. This is  as manufacturers implemented efficiencies in pricing, internal processes, supplier management and program management.

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Operating margins

The analysis found that European commercial aircraft producers improved profits by 26.9 per cent, although operating margins of 3.5 per cent remained well below the operating margins among North American manufacturers of 8.2 per cent.

“The key challenge for the commercial aircraft manufacturers is to de-risk the supply chain by helping suppliers address the capacity and capability requirements of increased rates of production, while lowering overall costs,” added Captain.

Deloitte analysed the financial performance of 100 major global and US aerospace and defense companies in 2013. The key financial indicators analysed include sales revenue, operating earnings and operating margins, obtained through company filings and press releases.