There are few industries that were impacted as rapidly and severely by COVID as the aerospace sector.
The sudden stalling of the industry felt all the more significant coming as it did after several years of record levels of orders and deliveries. The near instant collapse in passenger numbers resulted in falling orders for planes. More than that though it led to a general level of caution, with a tightening of finances as the industry prepared itself for a period of contraction and uncertainty.
Global figures bear out that sudden collapse in industry confidence. In 2020 we witnessed a 42% fall in deliveries from 2019 figures, and an even higher 55% reduction from 2018’s delivery numbers. Orders for new planes paint a similar picture, plummeting almost 60% on the previous year.
And the impact was felt beyond just orders for new planes. The pandemic also impacted on maintenance. As flights were grounded, there was a reduced need for ongoing maintenance and replacement of parts. The total impact on the industry has been profound, both for manufacturers of aeroplanes and for companies like ENL Group that are part of the wider supply chain for aerospace.
An Industry in Recovery
However, as the economy starts to recover, there are growing signs that a corner has been turned. It is clear that there is a level of pent-up demand within the system which is now fuelling a rapid expansion of activities.
Aerospace by its very nature is a global industry and signs of growth are being seen around the globe. One of the biggest signs of this recently can be found 3,500 miles away in Dubai.
Earlier in November the biggest ever Dubai Airshow took place. 104,000 visitors attended the event which saw a record level of USD 78 billion dollars of deals being announced. This pattern is being repeated around the world, as borders reopen, passenger numbers increase, and the industry re-establishes itself for the post-pandemic world.
The Rise of Freight
There is also another interesting trend in the industry, as freight emerges as a key growth market. “The freighter markets are on fire right now,” Stan Deal, executive vice president of Boeing, told the Dubai event. That’s where we see real growth.”
In fact, Boeing has announced plans to add three conversion lines for its 737-800BCF to convert aircraft to freighters. One of these conversion lines will be located at London Gatwick.
This trend started during lockdown. Before the pandemic freight was often carried in the holds of passenger aircraft. As passenger flights were grounded the industry started to focus on dedicated cargo planes.
Many other airlines also reported robust growth in cargo volumes during the pandemic. Emirates Airline’s latest half-year earnings reported a 39% increase in cargo volumes, bringing them almost to 2019 levels.
What this demonstrates is, even with uncertainty about future restrictions as we move deeper into winter and new variants emerge, the aerospace industry is evolving its business model to ensure that it finds areas of growth.
It is not just freight which is seeing green shoots appearing either. Passenger numbers are returning too, leading to an uptick in orders for new aircraft.
Following the challenges of 2020, the signs are that the industry is starting to recover. The two biggest players in this market are Boeing and Airbus. Airbus, in particular, has grounds for optimism. Earlier in November the company received an order for 255 new A321 aircraft in the most significant deal since the start of the COVID pandemic.
The past two years have been particularly challenging for Boeing, but it appears that its future too is looking brighter. Orders and deliveries are on the rise. The 737 MAX, which was grounded due to high-profile safety concerns has now been cleared to return to the skies in much of the world, though the jet is still prohibited from flying in China, which is now the world’s second-largest market for commercial air traffic. However, following a recent successful test flight is it expected that the 737 MAX will be able to return to the skies of China in the next few months.
Grounds for Optimism
ENL Group has a long and proud history and heritage supporting the aerospace. The very roots of the business started 60 years ago supplying components for aviation sector.
This is a tradition that continues to this day, with a customer base that includes Boeing, Airbus, and Bombardier. We supply high-quality, lightweight plastic components to exacting standards that aerospace customers know they can trust.
Throughout this period, the industry has always been at the forefront of innovation, developing new products, processes and business models to meet the changing needs of the market.
The last two years have been an incredibly challenging time for the aerospace industry. However, all of the signs suggest that a corner has been turned, and that is it now finally bouncing back.
About ENL Group
ENL Group is based in Portsmouth, UK and Veľké Kostoľany, Slovakia. Established in 1958, we have been servicing UK-based and European companies for decades. Working with a secure supply chain, ENL provides quality components for quality-driven customers – with full certification for all of our products and quality checking at every stage.
Operating 24/7, we design, manufacture and deliver critical components for our customers across the UK and Europe.
Contact Us for more information about ENL and how we can help your business.