This report provides an update of the German aerospace industry and related industries, such as commercialaviation and defense. In 2009, the German aerospace industry grew by 4% despite in a difficult economicenvironment.Revenues in the aerospace sector increased by 4.0% to EUR 23.6 billion from EUR 22.7 billion in the previousyear. The commercial aviation industry grew by 2.7% to EUR 15.6 billion. The defense and space sectorsremained stable and positive.
Research spending reached the record level of EUR 4 billion in 2009, representing17.1% of overall aerospace revenues. The export share, which is typically very high, decreased to 68% or EUR16 billion of overall aerospace revenues. It is noteworthy that all of the 150 regular member companies of theGerman Aerospace Industries Association (BDLI) survived the economic crisis.Some 93,700 people are directly employed in the German aerospace industry, representing a steady increase of15% since 2007. The air transport sector employs an estimated 265,000 people. Moreover, some 850,000 jobsare supported throughout the supply chain of the aerospace industry. With its strategic importance, the aerospaceindustry is considered a catalyst for creating and safeguarding future economic growth in Germany. Researchspending is significantly higher than in any other industry.
German & European Aerospace Industry
Despite the challenging global economic climate, the German aerospace industry was able to maintain its ascentin 2009. Revenues in the aerospace sector increased by 4% to EUR 23.6 billion, up 900 million from 2008. Thenumber of employees increased by 0.8% to 93.700 throughout all industry segments. The BDLI reported that theexport share amounted to 68% of the overall aerospace revenues, which is a decrease of 2% compared to 2008.Further efforts in research and development will be essential to strengthen the competitiveness and boost theexports of the German aerospace industry, especially in light of the challenges posed by the current economiccrisis.
Revenues in the commercial aviation industry grew by 2.7% to 15.6 billion in 2009. As the strongest revenuegenerator of the German aerospace industry, commercial aviation holds a 66.2% share of all revenues (66.7% in2008). According to the International Air Transport Association (IATA), passenger demand in 2009 was down3.5% with an average load factor of 75.6%. Freight showed a full-year decline of 10.1% with an average loadfactor of 49.1%. Against this backdrop, it is remarkable that more commercial airplanes were built in 2009 than in2008. Airbus delivered some 498 airplanes or 15% more than in 2008. Only the commercial helicopter sectorwas struck by a significant decline of orders. Lost revenues could partly be recouped via defense orders andthrough diversifying into new service areas.
The latest indicators show a positive trend for 2010, although themarket situation is still uncertain. The long-term prospects remain buoyant. Airbus foresees demand for 24,000new passenger aircraft with more than 100 seats, worth USD 2.9 trillion, based on growth in air travel expectedfor the time between 2009 and 2028. Single-aisle aircraft will account for 71% of this demand and twin-aisles willaccount for 24%. Boeing is even more optimistic by assuming a demand of 29,000 aircraft for the same period.The German aerospace supply industry continues to consolidate at a steady pace in order to meet therequirements of a better relationship to commercial aviation programs.
The U.S. dollar has recently risen againstthe euro, but the euro-dollar difference still has an impact on many German aerospace suppliers.Consequently, the large aerospace manufacturers have to source outside Western Europe in order to staycompetitive when selling to the dollar zone. This offers market entry opportunities for U.S. aerospacemanufacturers. Buyers throughout the industry are looking for U.S. products. German firms have to at leastpartially relocate production facilities to the dollar zone, which may open joint venture opportunities for U.S.aerospace suppliers.
Defense & Security
The German defense and security sector grew by 4.6% to EUR 6 billion in 2009, accounting for 25.4% of theGerman aerospace market. The industry benefited from key military programs, such as the Eurofighter Typhoonwith 200 deliveries over the year. Eurocopter retrofitted 26 of the German army’s CH-53 GS/GE transporthelicopters. A total of 184 A400M versatile airlifter aircraft have so far been ordered by Belgium, France,Germany, Luxembourg, Malaysia, Spain, Turkey and the United Kingdom. Another project with a possibleGerman participation has caused controversial discussions for the last two years. On April 20, 2010, EADSannounced that it would re-enter the competition for the U.S. Air Force (USAF) KC-X tanker contract and submit aproposal until July 9. EADS North America, in cooperation with Northrop Grumman will offer an Americanassembledvariant of the Airbus A330 Multi Role Tanker Transport (MRTT) aircraft, KC-45A, to replace the BoeingKC-135 Stratotanker. The overall value of the deal is estimated at USD 35 to 50 billion. Whether EADS NorthAmerica has a chance against competitor Boeing remains to be seen.
The space industry saw its best development in 2009. Revenues increased by 14% to EUR 2 billion, representinga 7.2% of the German aerospace market. The number of employees also rose by 9.5% to 6,200. The Germanspace industry benefits from projects of the European Space Agency (ESA). Last year saw 7 successful starts ofthe Ariane 5 rocket that is manufactured under the authority of the ESA. Moreover, the satellite programTerraSar-X produced excellent results through a new kind of public-private partnership between the GermanAerospace Centre (DLR) and Friedrichshafen-based Astrium GmbH.
According to the statistics on the development of air traffic at Germany’s 23 international airports published by theGerman Airports Association (ADV), the number of aircraft movements decreased by 6.6% from 2.5 million in2008 to 2.1 million in 2009, whereas air passenger traffic decreased by 4.6% to 182 million (incl. transit). Forexample, the passenger volume at Frankfurt Airport fell by 4.7% from 53.4 million in 2008 to 50.9 million in 2009,mainly due to a decline in demand from business travelers. Frankfurt Airport maintained its position as Germany’slargest and Europe's third-largest airport in terms of airline passengers. The latest ADV figures demonstrate thatair traffic in Germany is on the road to recovery. The number of passengers grew by 4% in the first quarter of2010 and air freight was up 26.8%.