Aerospace in APAC: The roar of the Asian tiger
Singapore is always bustling, busy and loud. But at the Singapore Airshow earlier this month there was a roar in the background. The roar of the of the Asian Tiger.
The economic growth in Asia-Pacific (APAC) is being reflected in its aerospace, aviation and defence industries, and the region is set to overtake the US to become the world’s largest market.
Airbus’ new executive vice president and chief of sales, marketing and contracts, Eric Schulz, put it into context as he briefed the media ahead of the showcase event.
“Accounting for one third of Airbus total backlog, one third of Airbus total orders and one third of the overall Airbus in-service fleet, there is no doubt that Asia-Pacific is a core market for Airbus,” Schulz said.
Passenger traffic in the region is expected to triple over the next 20 years and in the lucrative widebody market, it accounts for almost half of the entire worldwide demand.
The single aisle prospects are not bad either. APAC demand accounts for 9,800 aircraft, around 40% of the 24,800 global fleet. Indeed Boeing’s senior vice president for the region, Denesh Keskar, says the narrowbodies for the region will represent 70% of all deliveries over the next 20 years.
But Airbus and rival Boeing will not be getting it all their own way.
Chinese and Japanese manufacturers are pressing on with programmes – although both The Commercial Aircraft Corp of China - or COMAC for short - and Mitsubishi are facing delays.
COMAC said at the Singapore show that it is targeting Southeast Asian customers in an attempt to expand its customer base outside of the world's second-largest economy. It has already secured more than 700 orders for the 168-seat C919, which flew for the first time in May, although the majority of customers remain Chinese leasing companies and Chinese airlines.
The manufacturer’s regional jetliner, the ARJ21 which has been operating for a year now, has some 400 orders – a small part of the 3,010 new aircraft forecast for the regional jet market (up to 150-seats) over the next 20 years, but, alongside Mitsubishi’s MRJ, it will surely bite into the space currently dominated by Bombardier and Embraer.
The region’s defence spending – and defence manufacturing – is also booming. China has set its targets for a modernised and “world class” military force over the next two decades but is also intent on indigenous development. It is carving a niche in the armed unmanned market. Chengdu’s Wing Loong UAV - a competitor to the USA’s Predator – has already won a number of orders across the Middle East and is now targeting South East Asia in particular.
Industry analysts at Singapore said that many current opportunities were developing due to the length of time approvals are taking for US equipment.
The West certainly needs to take the competition from Asia seriously. It was fascinating to see at Singapore Airshow just how far innovators are reaching.
Singapore itself is buzzing with new ideas and products. Aerospace already accounts for 21,000 jobs on the small island and this will grow by a further 5% over the next two years.
Visitors to the show heard how Singapore Engineering is developing technology for autonomous freighters, while a small manufacturer on the island, AirGo, has developed a composite seat that will offer three inches of extra width and added comfort in preparation for the proposed long range trans-Pacific routes.
Western companies are developing services, partnerships and manufacturing facilities.
GE Aviation is to establish a new 50,000 sq.ft manufacturing plant to make component parts such as the high pressure compressor vanes for the GE9X engine powering the Boeing 777X.
Rolls-Royce is establishing an R&D lab in Singapore while Thales announced it is expanding its MRO facility in Singapore for avionics systems, making it the French company’s largest such facility in the world.
Swiss MRO business SR Technics is growing its Malaysian operation following approvals from China’s regulator, and Moog is to establish a component repair centre in Singapore.
All in all, it is quite clear that the Asia Pacific region can be a rich market of opportunity for the global aerospace industry.
But this tiger is no pussy cat. It can bite back and will surely be as territorially dominant as its animal namesake.