Aerospace companies give peace a chance

The word’s aerospace companies are driving increasing amounts of revenue from the commercial aerospace sector, rather than defence, a new report has shown.

In its latest annual report for the global aerospace and defence (A&D) industry, Deloitte found that commercial aerospace revenues increased 16.2% in 2012, offsetting a 1.3% drop in the defence segment. Overall the industries achieved combined revenues of US$692.5 billion last year – an increase of 5.9%, and up from a 1.6% increase in 2011.

And driving growth in the commercial sector were Boeing and Airbus. The American and European commercial aircraft manufacturers surpassed their previous year’s combined production with the delivery of 1,189 aircraft in 2012. This is the highest production level in the history of large commercial aircraft. In 2012, commercial aerospace accounted for 45.9% of the total revenues posted across the global A&D industry, up from 41.9% in 2011. Combined revenue increases for commercial aircraft for these two companies alone was US$20.5bn.

And Deloitte predicted that the shift from defence to commercial aerospace spending would continue in the years ahead. The report stated that the dominance of the defence segment was largely due to the wars in Iraq and Afghanistan. But the reduction of military operations in these countries, coupled with US defence budget cuts, is likely to shift the balance back to commercial aviation.

“Barring a ‘black swan’ event in commercial air transport operations, or increased instability in the key geographies of the South China Seas, North Korea, Syria, Iran, or flare-ups in non-secure border regions, this trend towards parity and beyond is likely to continue for several years,” the report stated.