The aircraft parts industry is defined as companies that focus on the aerospace parts market. These include, for example:
Establishments primarily engaged in manufacturing aeronautical instruments and electronic navigational equipment are not considered part of this sector.
The aerospace industry is divided into two main sectors: the civil sector and the military sector. The military sector has declined sharply since the end of the Cold War. There has also been a decline in overall expenditures in the aerospace industry in general. This trend has led to consolidation and restructuring worldwide. The aftermarket sector today is a substantial source of income. All Aerospace primes and suppliers have a major stake in this market.
Internationally, the market for aircraft parts in the civil aviation sector is dominated by Boeing (60 per cent of the global market) and Airbus Industry (30 per cent of the market). This oligopoly controls the standards that aircraft parts suppliers must meet. In addition to this concentration of companies, the aerospace component industry and market is concentrated geographically in the United States (75 per cent), although Europe (14 per cent) and Japan (5 per cent) are important centres. The military aircraft parts industry is dominated by large aerospace and defence conglomerates in a small number of large, industrial countries such as the United States, France and the United Kingdom.
Aircraft hydraulic and pneumatic assemblies comprise 6.7% of total industry shipments. The split between civilian and military hydraulic and pneumatic assemblies is 78% for civilian and 22% for military applications. Aircraft power transmission equipment comprises 6.1% of total industry shipments. The split between civilian and military power transmission equipment is 56% for civilian and 44% for military applications.
The parts business requires a high degree of service and local interaction with the airline companies. Parts are more customized, and are not the high volume commodity type of parts found in the automotive sector, for example. Because of currency fluctuations, tariffs and similar import limitations, price controls and labor regulations can have a major impact on the sectors financial health. This is exacerbated by the fact that the industry is capital intensive compared to other manufacturing concerns.
A number of regulatory and market access issues negatively affect the industry including the lack of harmonization in standards around the world, e.g., air worthiness and environmental standards; impediments to licensing and transferability of personnel between company sites in different countries; and the existence of international subsidy programs and various non-tariff barriers.
The manufacture of aircraft parts and auxiliary equipment encompasses a variety of manufacturing processes. The industry is under pressure to switch to alternative materials and processes which comply with changing domestic and international standards. As well, the industry must develop more efficient and environmentally friendly aircraft parts products to meet environmental standards aimed at reducing aircraft noise and engine combustion emissions.
Boeing, Raytheon, and Lockheed Martin announced an Internet trading exchange for aerospace parts in March, 2000. Aerospace and defense companies will bid, buy and auction original airplane parts and replacement parts. Several companies such as StraightAERO.com, Avref, OneAERO, fipart.com and ILS provide list price part reference, technical, and marketing data which help users to understand the volume and basic economic metrics such as supply and demand of specific parts.
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