Carola Muschke (Manager EU Projects) Hamburg Aviation (Cluster association)
Actual challenges for international suppliers in the (civil) aviation industry www.renewables-made-in-germany.com
Actual challenges for international suppliers in the aviation industry
Framework: The world we are living in: Growth Despite economic crises the aviation sector is expected to grow about 5% worldwide during the next years! (IATA)
Actual challenges for international suppliers in the aviation industry
Consequence: worldwide emission reduction ACARE: Vision 2020
A reduction in perceived noise to one half of current average levels. A 50% cut in CO2 emissions pppkm (50% cut in fuel consumption: new aircraft of 2020) 80% cut in nitrogen oxide emissions (Nox)
European Commission: Flightpath 2050
75% reduction in CO2 emissions & a 90% reduction in NOx emissions. The perceived noise emission of flying aircraft is reduced by 65% (relative to a typical new aircraft in 2000 )
IATA: Carbon-neutral growth
Improvement in fuel efficiency of 1.5% per year from 2009 to 2020 A cap on net aviation CO2 emissions from 2020 (carbon-neutral growth) A reduction in net aviation CO2 emissions of 50% by 2050, relative to 2005 levels
ICAO: Assembly Resolution A37-19
Global aspirational goals for the international aviation sector of improving 2% annual fuel efficiency and stabilizing its global CO2 emissions at 2020 levels, and further work to explore the feasibility of a long-term global aspirational goal
Actual challenges for international suppliers in the aviation industry
Airbus’ eco-friendly endeavors Airbus R&D investments are over €2 Billion of which more than 90 % have environmental benefits.
Airbus is committed to the Flightpath 2050: 75 % CO2 emissions reduction/pppkm 90 % NOx emissions reduction
65 % Noise reduction
These targets were set by the ACARE against the 2000 baseline.
Boeing´s environmental policy: “Looking ahead to the next five years, we remain committed to zerocarbon growth by continuing our environmental conservation efforts while ramping up production. Our goal is to achieve zero absolute growth in carbon emissions, water intake and solid waste sent to landfills, and zero revenue-adjusted growth in hazardous waste generation, by 2017.”
Goals are shifted to suppliers
Actual challenges for international suppliers in the aviation industry
Consequences:
Projects like CARE
New energy efficient production, materials, technologies, green tracing & tracking gain importance New business opportunities appear Green innovations will be difficult to protect, as main suppliers work for all OEMs Free innovation development vs. price orientated supply for market needs Global sourcing also of limitted of raw materials Long process from innovation to market entry return of investment in 30 years, pre-financing and long term perspectives
(Image: Airbus)
Actual challenges for international suppliers in the aviation industry
1.Challenges: Suppliers need to… …be smart & flexible enough in order to adapt to new & quickly changing developments/oportunities worldwide be innovative & invest in R&D in greener aviation (light weight materials, fuel cell) …network & take a look into the future, develop products for future needs …deal with less raw materials, high fuel prices, ecological awareness of population, emission trading …participate in national/regional R&D projects to acquire necessary funds LuFo, H2020, bilateral projects with Mexico, etc. Support of SME via clusters
…cooperate with international players as labs, universities, OEMs or research centres and other suppliers for a common & integrated approach
Actual challenges for international suppliers in the aviation industry
Framework 2: Globalization & Appearance of new OEM Situation today: OEM Duopoly: Boeing Airbus
Aprox. 50-50% market share
Situation tomorrow: Competition:
• • • • •
Embraer Bombardier Comac UAC Russia Japan, …
„sporty game“ new competition and high pressure
Actual challenges for international suppliers in the aviation industry
OEM´s supplier consolidation OEMs are influencing their large suppliers indirectly to buy smaller ones because of fears that weaknesses in the supply chain could undermine the aircraft makers’ ambitious plans to increase production. Boeing and Airbus each have about 1,500 suppliers ranging from so-called tier 1 companies providing aero structures or equipment for jets to smaller tier 2 and three groups making components.
OEM – 1.Tier – 2.Tier – 3.Tier – n.Tier
Actual challenges for international suppliers in the aviation industry
Actual challenges for international suppliers in the aviation industry Consequences:
The current consolidation process is strongly connected to an increasing internationalization. Pressure on the prices within the value chain, tough contracts, less profit, high administrative effort Greater dependence on Tier 1 and increased risk sharing/pre-financing by suppliers. New OEM, depend on established suppliers and their know-how, less competition Innovations process is slowing down, investment only for market demand, less competition in R&D activities Globalised supply chain, no national contract placing, also politically driven contracts in markets of strategic interest SME do not want/can not go international, more and more mergers More bigger companies threaten the existence of middle class businesses Production in third countries, spreading of know-how International market entries are a big challenge, lessons must be learned New opportunities in growing markets
Actual challenges for international suppliers in the aviation industry
2. challenges: Suppliers need to… …make sure no information is lost in the supply chain (3Tier not knowing what OEM want/are planning) …identify and contact the relevant Tier level above /right client worldwide/SME: cooperate!
…find their own role in a global market (consolidate, adapt to market needs) … take advantage of the new possibilities the new OEMs offer! New clients, less dependence …have a stable financial situation/access to credits/equity …find new business cases
Successful suppliers are internationally acting companies Find the right international partner
Thank you for your attention! Carola.muschke@hamburg-aviation.com www.renewables-made-in-germany.com