Export of Aircraft Parts Fast Growing

Top Markets for U.S. Aerospace and Defense Suppliers in Rank Order for calendar year 2017 in USD billions

Biggest export opportunity for aerospace contracts is supplying Aircraft parts. China Commercial Aerospace Market

 Market Landscape-  Best Prospects $18.875 billion commercial aircraft  Opportunities for business imported in 2018. aircraft and civilian helicopters growing quickly  By 2022 China is expected to overtake U.S. as the  China’s emerging world’s largest market. aerospace industry gives rise to supply parts to  Estimated 7,000 aircraft to China COMAC’s- ARJ21 be purchased within 20 regional jet and C919 years narrow body civil aircraft and the Aviation Industry  Market for parts growing of China’s(AVICS) MA 700 10% per year and other aircraft in design phase. Germany Aerospace Market

 Market Landscape  Market Opportunities  Hamburg a global distribution EU WTO Duty Free specific parts- 250 hub for Airbus parts and other  Increased demand for A320 and Bilateral Safety Agreement (BASA) A associated assembly 2009 agreement allowed some parts approved by FAA may be exporter to Germany with no EASA approval Parts Manufacturer Approval- The U.S. is unique in allowing the production of aircraft parts under FAA Authority known as Parts Manufacturer Approval or PMA. A big advantage since there is no equivalent in Europe so advantage over OEM shops who cannot supply to aircraft companies or MRO shops. United Arab Emirates Commercial Aerospace Market

 Market Landscape  Best Prospects  15% of UAE economy driven by  MRO needs growing quickly and aerospace poised to reach $8.8 billion by 2023, nearly 10% growth per  Fast becoming a major world year hub with 4 leading players based in UAE- Dubai based  Ground Services- Ground Emirates, low cost carrier, Handling, Catering, Fixed Based flydubai, Abu Dhabi based Operations Ethad Airways, and Sharjah based Air-Arabia  Aircraft Recycling and Decommissioning  UAE government in process of pouring 40 billion dollars in airport expansions  Emirates Airlines operates the most Airbus 380’s and a large Boeing 777 fleet. Singapore Commercial Aerospace- Asia Parts Hub

 Market Landscape  Best Prospects  Singapore parts market  Singapore is an ideal hub centers on the to serve the fast growing maintenance industry. aerospace markets in S.E. Asia- driven by numerous  Singapore is the top regional carriers( Air Asia, , market for aerospace parts Lion Jet, Thai Smile, etc.) exports- averaging over $5.7 billion between  Singapore operates some 2005- 2014; 80% of of the largest MRO aerospace imports and operations in the world U.S. suppliers having a including: ST Aerospace 65% share and SIA

The UK Airline Industry Current market trends:

. Mergers and acquisitions

. Focus on reducing cost base and improving profitability

. Number of passengers grew by 44 million from 2007- 2017

. Airlines are positioned to make overall investments of $75 billion to replace 504 existing aircraft and acquire 409 new aircraft Exporting to the UK

For U.S. companies selling to UK-

. Challenging for both SMEs and OEMs

. U.S. suppliers should consider collaborating with larger firms with a presence in UK

. Consider using a local distributor or agent

. Entering the UK aerospace market requires patience, investment, innovative products and competitive pricing Best Prospects/Current Demand:

Aero Propulsion Advanced structures Aerodynamics *Rotor blades systems *Fuselage *Wing design *Engine *Avionics *Wing assembly *Undercarriage assembly Selecting Best Export Markets- Defense Industry Different models of Defense Exports

Foreign Military Sales(FMS) is the program The Direct Commercial Sales(DCS), U.S. by which the U.S. government assists allied companies negotiates directly with foreign nations and international organizations in entities, whether they are national acquiring military technology. Under FMS, governments, local law enforcement, or private the U.S. government assumes responsibility firms. The U.S. government is only involved in for the procurement of and transfer of the approval and issuance of export licenses requested defense articles, services and and is not party to the contracts training. DCS VS FMS  From the perspective of companies, because the DoD controls all aspects of FMS procurement, FMS are made on the same basis as sales to the federal government. Familiarity with the DoD’s procurement procedures make FMS attractive to U.S. defense contractors. DCS contracts with foreign defense entities may be subject to foreign government procurement , national security, and anticorruption laws that are difficult to navigate and may put U.S. companies at a disadvantage, such as requirements to partner with local companies or use local content. One big difference is the sales process- U.S. policy stipulates that most Letter of Requests be responded to with a Letters of Offers and Acceptance www.export.gov.industry/aerospace Key AerospaceTrade Events

 Singapore Air Show, 2.11- 2.16 • CA Step Supported Event • Paris Airshow/Farnborough • MRO Middle East Expo • Dubai, 2/25-2/26 Export Resources

 www.export.gov/industry/a  Country Commercial erospace Guides  U.S. Defense Export  www.export.gov/ccg/ Handbook- ITA 2016( online handouts); 2020  Brief Industry Snapshots edition pending  Best Prospects  www.aia-aerospace.org  Trade Shows  Current export data and  Embassy Contacts statistics California STEP Program