It's double or quits for aerospace actuation companies
It's double or quits for aerospace actuation companies
Invest and grow your capability – or quit the industry. That is the choice facing many suppliers in the actuation sector according to aerospace industry analysts Counterpoint Market Intelligence, who have just publishedAerospace Actuation 2006, a comprehensive survey of this $4Bn sector. Leading players include Goodrich, Hamilton Sundstrand, Moog, Parker Aerospace,Liebherr, Safran and Smiths Aerospace.
Based on interviews with large and small actuation suppliers and their customers, the report predicts that, while currently there are between four and five major players in each major area of actuation, this will reduce to two or three by 2010. Consolidation will increase, and some companies may well choose to leave the sector altogether rather than bear the cost of investment in technology such as electric actuation.
Pressures arising from onerous procurement terms, the need for economies of scale and competition from low-cost countries are common to virtually all sectors of the aerospace industry. Actuation faces an additional challenge in that customers increasingly demand complete systems, burdening suppliers with integration costs. The big players are competing on engineering as well as cost and so leading suppliers see systems integration as providing scope for differentiation. Customers gain in the main from procuring bigger packages but they can also perceive it as a threat, since it potentially places too much power in the hands of the supply sector.
In response to these pressures, the actuation sector is also predicted to become increasingly hierarchical, with up to 80 per cent of the cost of an actuator being outsourced, including most machining and even some detailed design.
The report also profiles 60 companies, reporting on profitability where published, and noting key contracts where identifiable. Aerospace Actuation 2006 costs £3,000 and is available from Counterpoint Market Intelligence,
Details available from: Counterpoint Market Intelligence, Tel: 44 (0)1722 718265, web site www.cpmil.com
