Civil Aviation Market Brief 2012

An Expert's View about Aerospace in Austria

Posted on: 19 Jul 2012

The Austrian market for civil aviation aircraft amounted to $.834.2.million in 2010 and is expected to grow by 8% in 2011.

Austria: Civil Aviation Market Brief 2012 Ingeborg Doblinger June 2012 Summary The Austrian market for civil aviation aircraft amounted to $.834.2.million in 2010 and is expected to grow by 8% in 2011, while Austrian aircraft and parts imports in 2010 amounted to $ 701 million. With domestic-based manufacturing limited to one company, Diamond Airborne Sensing GmbH, the vast majority of the market is served by imports. The major aircraft suppliers to Austria in 2010 were Canada with 25.3%, the United States with 21.2%, Brazil with 14.2%, Germany with 10% and France with 2.4%. The Austrian general aviation market is characterized by imports. Diamond Airborne Sensing GmbH is the sole Austrian manufacturer, and it produces only small crafts. The Federal Statistical Office gives only import/export figures for civil aircraft and related parts and equipment. No official aircraft production figures are available. Production figures and market demand estimates are based on sales figures obtained from the Civil Aviation Office and Diamond Airborne Sensing. Diamond Airborne Sensing in Wiener Neustadt, rolled out 164 single-engine two-seater and four-seater propeller-driven avgas aircraft in 2010. Approximately 95% of Diamond’s production is exported. The firm increased its production in volume by 86% compared to the previous year. Diamond uses diesel engines from the Austrian firms Austro Engines and Rotax. Suppliers for avionics are the U.S. firm Bendix King and Garmin. . We project an average annual growth rate of 8% for the Austrian civil aircraft market. It should be noted that the accuracy of estimated growth rates are problematic because of the possibility of large one-time orders that greatly skew the statistics. Aircraft leasing companies have become major factors in the industry as aircraft development and production costs escalate. For the airlines, leased aircraft offer the advantages of low capital investment and greater flexibility in adjusting to changing market conditions. The Austrian Airlines Group (AAG), now owned by Lufthansa, has a fleet of 7 Airbus 319, 9 Airbus 320, 3 Airbus 320-111, 3 Airbus 321-211, 2 Boeing 737-600, 2 Boeing 737-700, 7 Boeing 737-800, 6 Boeing 767-300 ER, 4 Boeing 777-200, 14 Bombardier Q 400, 15 Fokker 100 and 9 Fokker 70. Austria imported 15 single engine aircraft up to two tons, 6 twin-engine aircraft over 5.7 tons and 4 twin- engine aircraft over 20 tons and 4 helicopters in 2011. The principal end-users of civil aviation aircraft, parts and equipment are in the Austrian Airlines Group, as well as other charter airlines. Emergency medical services and the police use civilian helicopters. The market for corporate fleets and business charter operators appears saturated because of the low prices for flights available commercially. However, industry experts forecast a growth for this sector in 2012. The U.S. Commercial Service – Your Global Business Partner. 800-USA-TRADE In the very important category of single aircraft up to 2 tons, U.S. aircraft are dominant. A total of 723 units were registered in 2011. The largest share of this market is held by Piper, Cessna and Beech Aircraft. A strong competitor is Diamond. In 2011, 723 light aircraft (up to 2 tons), 110 aircraft up to 5.7 tons, 323 twin-engine aircraft over 5.7 tons, 189 twin-engine aircraft over 20 tons, 156 helicopters and 186 motor gliders were registered in Austria. This segment up to 2 tons had the highest import increase. Private Austrian pilots register their aircraft for business use to gain tax advantages. Other end-users are air taxi and charter services. Market Entry Austrians are generally well disposed toward Americans. Following a few general rules of Austrian etiquette will help maintain this positive feeling. Appointments should be made either by telephone or in writing well in advance, and prospective buyers or distributors should be given the option of determining the date and place of the meeting. Prompt response to letters and emails is very important. Some local firms have reported negative experiences in trying to contact U.S. firms, having to go through too many organizational layers and sometimes never getting a response at all. The exporter who can communicate in German will be much rewarded, even though most Austrians speak English. Austrians tend to place more emphasis on quality than price, especially for larger purchases. The quality of a product should therefore be its main selling point. Austrians are generally looking for long-term business relationships rather than immediate sales and profit. Hard selling is generally counterproductive. Current Market Trends There is a trend to invest in smaller more fuel efficient aircraft like the Embraer, Falcon, Cessna Citation and the Gulfstream to achieve operational efficiency and to meet market demand. Current Demand Demand for additional new passenger aircraft is slightly declining due to the economic downturn, with the exception of replacements. Both the Austrian Airlines Group and the general aviation operators will be replacing some aircraft of their aging fleet in the next few years. While the occupancy rate is still high, the yield is bad due to the high fuel costs and landing fees. However, demand for CARGO aircraft is increasing. There is also a high demand for aircraft parts, avionics and engine parts. Barriers There are no barriers in this market with the exception of high air navigation fees charged by Austro Control. The U.S. Commercial Service – Your Global Business Partner. 800-USA-TRADE Trade Events / Associations 2012: Farnborough International Airshow Farnborough, UK, July 9-15, 2012 Website: International Air Show for aircraft, defense and security equipment. 2013: Paris International Air Show Le Bourget June 17-23, 2013 Website: International Air Show for aviation and space. Dubai Air Show November 17-21, 2013 Website: International Aerospace Show Austro Control Website: Federal Economic Chamber –Aviation Department Website: Civil Aviation authority Federal Ministry of Transportation, Innovation and Technology Website: The U.S. Commercial Service – Your Global Business Partner. 800-USA-TRADE Available Market Research N/A U.S. Commercial Service Contact Information Name: Ingeborg Doblinger Position: Commercial Specialist U.S. Commercial Service, Vienna Austria Email: Phone: 43-1- 31339-2120 The U.S. Commercial Service – Your Global Business Partner. 800-USA-TRADE
Posted: 19 July 2012