Aerospace Industry Characterization September 30, 2018 Submitted by: ICF Submitted to: Contract #: (EP-C-16-020) Work Assignment: # (1-02) Aerospace Industry Characterization Table of Contents I. Preface .............................................................................................................................................. 4 II. Report Analysis Methodology ....................................................................................................... 5 1. Data Sources ................................................................................................................................ 5 1.1.3 Benchmark databases, industry conferences, and latest industry news & announcements .......................................................................................................................... 6 2. Benchmarks to Comparable Report ............................................................................................. 6 III. Introduction to Aerospace Production Market ............................................................................ 8 1.1 Commercial Air Transport ................................................................................................... 8 1.2 Business and General Aviation ........................................................................................... 8 1.3 Military ................................................................................................................................. 8 1.4 Civil Rotary Wing ................................................................................................................ 9 2. Nature of Aerospace Product Development and Life Cycle ........................................................ 9 3. ICAO CO2 Standard Applicability and Report Scope ................................................................... 9 IV. Large Jet Transport Segment of Commercial Air Transport Market ....................................... 13 1. Market Definition and Size .......................................................................................................... 13 2. Key Market Trends ..................................................................................................................... 14 2.1 Flattening Production ........................................................................................................ 14 2.2 Declining New Program Development .............................................................................. 15 2.3 Financial Pressures .......................................................................................................... 15 2.4 Emerging Process Technologies ...................................................................................... 16 2.4.1 Additive manufacturing: ................................................................................................ 16 2.4.2 Advanced materials: ..................................................................................................... 17 2.4.3 Automation: ................................................................................................................... 17 2.4.4 Faster processing: ........................................................................................................ 17 V. Regional Aircraft Segment of Commercial Air Transport Market ............................................ 18 1. Market Definition and Size .......................................................................................................... 18 2. Key Market Trends ..................................................................................................................... 20 2.1 Blurring of single aisle and regional jet distinction ............................................................ 20 2.2 Smaller OEMs entering the regional market..................................................................... 21 VI. Business and General Aviation Market ...................................................................................... 22 1. Market Definition and Size .......................................................................................................... 22 2. Key Market Trends ..................................................................................................................... 24 2.1 New Life in Light and Midsize Jets ................................................................................... 24 VII. Commercial Engines ................................................................................................................ 25 1. Market Definition and Size .......................................................................................................... 25 2. Key Market Trends ..................................................................................................................... 27 2.1 Differing Technology Approaches..................................................................................... 27 2.2 Market Positioning ............................................................................................................ 28 VIII. Market Participants ................................................................................................................ 29 Use or disclosure of data contained on this sheet is subject to the restrictions on the title page of this report. 2 Aerospace Industry Characterization 1. Aircraft OEMs in Commercial Air Transport and Business and General Aviation Segments that have Aircraft Subject to the ICAO CO2 Standards ..................................................................... 29 1.1 Boeing ............................................................................................................................... 29 1.2 Airbus ................................................................................................................................ 30 1.3 Embraer ............................................................................................................................ 30 1.4 Bombardier ........................................................................................................................ 31 1.5 Gulfstream ......................................................................................................................... 31 1.6 Other Aircraft OEMs .......................................................................................................... 32 2. Engine OEMs for Commercial Air Transport and Business and General Aviation Segments and Aircraft Subject to the ICAO CO2 Standards .............................................................................. 33 2.1 Pratt & Whitney ................................................................................................................. 33 2.2 GE ..................................................................................................................................... 34 2.3 Rolls-Royce ....................................................................................................................... 34 2.4 Safran ................................................................................................................................ 35 2.5 Other Engine OEMs .......................................................................................................... 35 Use or disclosure of data contained on this sheet is subject to the restrictions on the title page of this report. 3 Aerospace Industry Characterization I. Preface This report has been composed for the US Environmental Protection Agency (EPA) to provide a characterization of the commercial aerospace industry. Despite the aerospace market having a large scope across multiple market segments, this report only focuses on market segments and aircraft models to which ICAO’s aircraft CO2 standards are applicable. This report addresses the market sizes, segments, 10-year outlook, key trends, and key commercial airframe and engine OEMs to give a holistic background of the industry. This report was prepared by Peter Zimm and Kent Harli of ICF. Use or disclosure of data contained on this sheet is subject to the restrictions on the title page of this report. 4 Aerospace Industry Characterization II. Report Analysis Methodology 1. Data Sources As a specialized consultant in the field of aviation, ICF works across the aviation value chain – from airlines and aerospace equipment makers to airports and investors. Specifically, in the aerospace market, ICF provides aerospace thought leadership and comprehensive services. We work with manufacturers and component original equipment manufacturers (OEMs) on aftermarket strategies and assist buyers, sellers, and advisors with aerospace-related acquisition targeting, commercial due diligence, and document preparation. More specifically, the essence of the work we do spans across the following project types: • Analyzing market fundamentals • Developing business strategies • Assessing interest in new products and services • Conducting customer satisfaction assessments • Benchmarking supply chain functions. As we perform these projects for the largest clients in the industry, we continually develop up-to- date analyses and maintain our in-house databases that translate years of proprietary data in areas such as aircraft and equipment production forecasts and raw material demand projections into analysis for expansion, capital allocation, and other strategic decisions. Therefore, we constantly draw from