Aerospace and Defense Industry in Spain

An Expert's View about Aerospace in Spain

Posted on: 16 Feb 2010


Spain’s aerospace sector is a $6.1 billion industry with excellent opportunities for U.S. exporters. Looking at specific sectors, 63 percent of sales can be attributed to systems and frames, 13 percent to engines, 12 percent to equipment, and 12 percent to space. Spain’s most important aerospace companies are world leaders in the manufacture of small and medium-sized aircraft and aircraft gas-turbine engines and flight simulators, as well as in aircraft and engine maintenance. Airlines are renewing their fleets in response to the rapid growth of regional markets and the increasingly competitive airline market. During 2007, U.S. manufacturers and distributors had 29 percent of the import market ($316 million) with notable increases in the import of aircraft under 2,000 kg, mid-sized aircraft (2,000-15,000 kg), and propellers, rotors, and parts thereof.


In 2007, the aerospace industry’s revenue increased by 5.4 percent compared to the previous year.


Employment grew by 11.8 percent as well: in 2007, the sector employed more than 34,000 people. The aerospace industry currently dedicates 14.4 percent of sales to R&D (civil and military use are almost equal). Sales to end-users fell to $1.8 billion.


The international nature of all work on both military and civil projects can be seen from the fact that 70 percent of all activity was for export, a figure similar to that of the previous year, though some of these exports were generated by public purchases (A400M, A380, Frigates, etc.) and commitments deriving from them.


The Spanish aerospace industry achieved a surplus of $3.2 million in 2007. 1 Current best prospects for U.S. exporters are: avionics equipment, CNC (computerized numerical control) specialized machinery and software, ground support equipment, landing gear, aviation fuel, and pre-assembled components and parts.


Market Overview

Spain’s aerospace industry is primarily located in Madrid, Andalusia, and the Basque Country. Aerospace imports (under import code HS 88) totaled $1.1 billion in 2007, with a U.S. import market share of 29 percent. In 2007, Spain’s aerospace industry revenues totaled $6.1 billion, 34 percent of this figure earned in the military sector of the aerospace market. According to ATECMA, the association of Spanish airline industries, some $879 million, 14.4 percent of total revenues, was spent on research and development in 2007.


The Spanish aerospace industry employs more than 34,000 people. The largest aerospace companies are Airbus Military, formerly known as EADS CASA (part of the European Airbus consortium), AERNNOVA (formerly GAMESA AERONAUTICA), INDRA, and INDUSTRIA DE TURBO PROPULSORES (ITP). These companies conduct R&D, design, production, sales and maintenance on a variety of aircraft and their parts, spacecraft and electronic simulation systems. Spanish airline companies IBERIA, SPANAIR (part of an airline group along with Aerolineas Argentinas and AEBAL), AIR EUROPA, and VUELING AIRLINES are renewing their fleets to meet increased demand. Other Spanish airlines include Aerolineas de Baleares, Air Comet, Air Nostrum, Air Pullmantur, Airclass Airways, Audeli Air, Binter Canarias, Bravo Airlines, Clickair, Cygnus Air, Flyant, Futura International Airways, Gadair European Airlines, Gestair, Girjet, Hola Airlines, Ibertrans Aerea, Iberworld, Intermediacion Aerea, Islas Airways, LTE International Airways, Lagunair, Navegacion y Servicios Aereos Canarios (NAYSA), Orionair, Pan Air, Sky Service Aviation, Spanair, Swiftair, Tadair, Taxijet and Wondair. Air Nostrum, Vueling Airlines, and Lagunair are all lowcost carriers.


In recent years, the corporate aviation industry has boomed worldwide, and the industry in Spain is no exception. Worldwide sales in 2007 amounted to 170 firm orders for the Embraer 170, 405 for the Embraer 190, 60 for the Embraer 195 and 129 for the Embraer 175.2 Due to the privacy and discretion associated with the corporate aviation industry, ATECMA does not divulge specific statistical information. However, there is an increasing demand for air transport companies that offer the following services: executive flights, air ambulance, medical flights, corporate flights, air cargo, aerial photography, charters, registration and licensing of airplanes and maintenance service.


Based on its long experience in the design, manufacture and certification of complete aeronautical structures, EADS CASA carried out in 2006 a large number of deliveries, outstanding among them being the horizontal tail plane of the Falcon F7X. This year saw the completion of the certification documentation of the horizontal tail plane of this aircraft and the certification fatigue tests were concluded.


Within the closed price contract signed with EADS CASA for the design of the central casing, trailing edge, elevator, tip and central fastener of the horizontal tail plane of the Falcon F7X, CT INGENIEROS (a subcontractor of EADS CASA passed the first flight milestone and delivered all the calculation documentation and the modifications that took place up to this phase of the program, now very close to certification.3

Airlines with fleets of 10 or fewer airplanes are Aerolineas de Baleares, Air Comet, Air Pullmantur, Airclass Airways, Audeli Air, Cygnus Air, Flyant, Ibertrans Aerea, Iberworld, Intermediacion Aerea Islas Airways, Lagunair, Navegacion y Servicios Aereos Canarios (NAYSA), Orionair, Pan Air, Sky Service Aviation, Tadair, and Taxijet.


GESTAIR is the biggest player in the Spanish corporate aviation industry, boasting a fleet of 28 airplanes. This fleet includes: Embraer Legacy 135, Beechcraft 350, Citation Jet, Citation Jet 2, Citation V Ultra, Falcon 20 Retrofit, Falcon 50, Falcon 900 C, Falcon 2000, Global Express, Gulfstream 200, Gulfstream 550, Gulfstream IIB, Gulfstream IV, Gulfstream V, Hawker 800 XP, Premier, Lear Jet 55, and Westwind 1124 IIB. GESTAIR operates from six locations in Spain: Madrid, Palma de Mallorca, Barcelona, Burgos, Santiago de Compostela, and A Coruña. (Please see the appendix for more information on Spanish airlines and aerospace companies).


Regional markets are growing, and Spanish airports are being renovated and expanded. The spare-parts market is also growing. U.S. spare-parts firms can look forward to excellent trade opportunities with Spain, as U.S. aeronautical products are considered highly technologically advanced. A comprehensive air transport agreement between the United States and the European Union, signed in March 2007, is certain to increase the growth of international trade in addition to aviation liberalization. According to a report by the U.S. Department of Commerce’s International Trade Administration, the estimated value of the agreement is $12 billion in annual economic benefit “to the transatlantic airline and related industries.” The overview of the official report is as follows:


“On March 2, 2007, the United States and the European Union (EU) concluded a comprehensive air transport agreement with 27 EU countries. The agreement, which was signed in conjunction with the April 30, 2007, U.S.- EU Summit in Washington, D.C., has tremendous potential for transforming air travel and trade across the Atlantic.


“The U.S.-EU economic relationship has contributed to commercial success on both sides of the Atlantic. It has opened investment, promoted trade in goods and services, and enabled the mobility of persons through initiatives such as the Visa Waiver Program. The United States and the EU lead liberalization efforts in the World Trade Organization (WTO), and they continue to work together to remove the remaining economic barriers.


“The U.S. aviation relationship with the European Union and the member states, however, has not kept pace with our larger economic and commercial ties. The EU and the United States are the two largest air transport markets in the world. Together they account for more than half of all global scheduled passenger traffic and 71.7 percent of the world’s freighter fleet. The European country with which the United States has had the closest relationship overall, the United Kingdom, is the country with which it has had our most restrictive aviation relationship.


“The U.S.-EU agreement is thus historic and supports not only aviation liberalization but also the growth of international trade. Aviation plays an important role in driving globalization, enabling trade by bringing businesspeople together, moving high-value, time-critical products, and contributing to the expansion of travel and tourism.


“Open Skies agreements remove regulatory limits on the number of carriers a country may designate, the number of flights, the routes flown, and the type of aircraft an airline may use. Open routing provisions that permit unlimited flights between the parties also allow carriers to continue flights on the third-country markets. While removing barriers to allow market entry and service, the agreements affirm the critical operations of civil aviation, such as safety and security. The agreements cover operations by scheduled and charter operators, for passenger and all-cargo services.”


By Carlos Perezmínguez and Nerissa Berrios

Read the full market research report

Posted: 16 February 2010

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