This section gives you more information about your chosen area of operation. Answer the questions correctly, and you will have the opportunity to develop your engine further in the next section and win points for getting the perfect scorecard.
The civil aviation industry is cyclical, being sensitive to the economic cycle. In times of economic hardship, people simply fly less often than they do in the good times. This is true of both the leisure and business sectors. However, over the long term, there are various factors that were driving the growth of air traffic, and which are likely to come back into play when the global economic situation improves. They include:
- The rapid growth of emerging markets where economies and demographic developments are both being driven by, and benefiting from air travel:
- The liberalisation of aviation markets around the world, which is giving greater market access to airlines, and wider choice for passengers;
- The continuing growth of low-cost carriers across the planet, but particularly in Asia;
- The emergence of megacities, and increasing congestion at airports.
- The top ten defence spenders are the USA, UK, France, Japan, Germany, Saudi Arabia, Italy, India, South Korea and Australia. Combined, their annual spend is $1 trillion.
- The US marketplace dominates the defence business, accounting for 66% of spending.
- However, there is a good spread of spending across the globe, and the dynamics are changing. Whilst defence spending in traditional markets is decreasing or flattening, emerging markets such as India, Saudi Arabia and South Korea offer significant opportunities for growth.
- Operations and maintenance account for the largest proportion of the spend a third.
- Current global military deployments, in Afghanistan for example, offer opportunities in the services and military transport markets.
- Cost reduction initiatives resulting from constrained defence budgets mean that customers are seeking cost-effective products and services. Some customers are moving towards long-term service contacts which are often more cost-effective.
- There is growth in the Intelligence, Surveillance and Reconnaissance (ISR) market.
- There is continued investment in research and technology, often shared between government and industry.
In conclusion, substantial opportunity exists within the Defence market. Demand for military aero engines and engine-related services is worth around $450 billion over the next twenty years (original equipment $170 billion; aftermarket services $280 billion). The spend on research, development, technology and engineering is in addition to the $450 billion, with global engine research and development worth around $20 billion (over twenty years).
The Civil Aviation Authority (CAA) regulates the UK aerospace industry. Their responsibilities include:
- Air Safety
- Economic Regulation
- Airspace Regulation
- Consumer Protection
- Environmental Research & Consultancy
Other similar organisations include:
- European Aviation Safety Agency (EASA)
- Federal Aviation Administration (FAA)
The Advisory Council for Aeronautics Research in Europe (ACARE) has set out a vision of air travel in 2020, which many European countries have signed up to. Their goals include:
- A reduction in perceived aircraft noise to half the current level.
- A 50% cut in CO2 emissions per passenger kilometre.
- Increased punctuality - 99% of all flights arriving and departing within 15 minutes of the timetable, in all weather conditions.
- A steady and continuous fall in travel charges through substantial cuts in operating costs.
Unlike civil aviation the defence sector has less stringent requirements in terms of noise and emissions. The focus of the defence aerospace sector is on mission readiness and being able to perform a given task in the best way. This includes fuel usage as fuel is now a significant element of spend in military operations and is prompting the application of the latest propulsion technologies.
While the defence sector is not governed by the same environmental and noise legislation as civil aviation the safety rules are just as rigorous. Safety issues are regulated by organisations such as:
- Civil Aviation Authority (CAA)
- European Aviation Safety Agency (EASA)Federal Aviation Administration (FAA)
In the UK the CAA regulates the safety of all aviation in partnership with EASA. The Ministry of Defence (MoD) provide board members and seconded staff to the CAA.
Civil Aviation industry faces a multitude of complex challenges due to its the increasingly high profile. and vulnerable position it is in.
The whole industry actively guards against risks including:
- Market risk. As stated earlier, civil aviation is very sensitive to economic cycles as factors such as GDP growth, price of raw materials, aircraft productivity challenges airlines to provide higher level of services at a reasonable price.
- Operational risk. Flight safety is the top priority in the industry. An effective planning, decision making and execution process will reduce the uncertainties and risk-prone activities in engine design, aircraft service and maintenance.
- Political risk. Civil Aviation is also a highly political charged industry. Policy changes from aviation authorities on emission reduction, flight punctuality and pricing regulations require key players to be more forward looking and flexible both operationally and financially.
- External events. External events such as snowy and icy conditions, epidemics, war, terrorism, and even volcanic ash eruption, could can lead to disruption to normal operations.