Today we’re highlighting the Commercial Aviation Industry with a report from Moody’s.
“The commercial aviation industry has demonstrated remarkable resilience over the last few years and still appears to be solidly positioned in the middle of a growth phase. Orders and commitments for new airplanes have yet to take the breather that many in the industry have been expecting, although we still think they will cool off in a more noticeable way over the next year or so. The two dominant large commercial airframers—Airbus, a unit of European Aeronautic Defense and Space Co. EADS (A2 stable),and Boeing Co.(A2 stable)—each booked orders totaling approximately $70 billion at the recent Paris Air Show, about half of which were firm orders (see “Strong Orders at Paris Air Show Are Credit Positive for Commercial Aerospace Sector”). Although actual selling prices are usually discounted by about 50% on average, these lofty values were more than double prior-year levels as more of the newer, more expensive widebody airframes were represented in this year’s take.
While the much larger narrowbody category (e.g., 737, A320) will continue to rule the skies, it is the widebodies (mainly the 787 and A350 XWB) that will grow at a much faster clip, albeit off of a much lower base, and contribute most significantly to our expectations of accelerated revenue and cash flow growth. The ongoing flurry of activity bodes well for the entire supply chain and remains particularly important given the eroding market opportunity in the defense sector, with which there is much overlap in terms of both OEMs and suppliers. Moreover, the competitive environment is expected to…”
Purchase this report on the Global Aerospace Industry