MarketLine Blog

Posts about Aerospace

Qatar Eurofighter Typhoon deal: BAE sale should not distract from harsh reality of lost markets

MarketLine

The decision of the Qatari government to buy 24 Eurofighter jet aircraft built by BAE is useful but should not disguise a stark reality: at present the jet is losing out badly to the French made Rafale, especially in what were formerly highly productive markets in the Arabian Gulf. The danger in placing too much faith, or emphasis, in attempting to turn around sales is that very few nations have the available resources to buy in the numbers BAE would ideally like. The current geopolitical problems in the Gulf suggest… Read more

Airforce modernization picks up pace in the Middle East

MarketLine

Tension in the Middle East has been expanding in recent years as the emergence of a new de factor leader in Saudi Arabia has led to the country reacting aggressively to what it perceives to be an expansion of Iranian influence and power in the Middle East. This tension is ultimately leading to a de facto arms race between the two powers wherein both also seek to stay ahead of the other from a technological point of view. Sanctions whilst holding back Iran in recent years have now been removed,… Read more

Norwegian: The low cost airline with ambitions to fly long haul

MarketLine

Norwegian Air is a no frills fly service that is looking to shake up the long haul industry. For a number of years the rapidly growing budget airline players have been considering moving into this sector but technical problems, regulatory issues and competitors have got in their way. Norwegian Air however, has found a way and now offers a number of routes from Europe across the Atlantic using the new breed of efficient yet smaller airplanes from Boeing and Airbus. However, this transition is not without issues and availability of… Read more

Monarch Airlines: Management not to blame for collapse of UK’s longest-serving airline

MarketLine

In the early hours of Monday October 2, 2017, KPMG announced that it had entered the office of Monarch Airlines and the company had officially entered administration. In the following hours the Civil Aviation Authority chartered 30 planes from across Europe to repatriate some 110,000 British citizens and customers who were then stranded abroad with no return flights. Cancellations of every flight from October 2 and onwards have affected some 300,000 bookings and likely close to a million individuals, and Monarch’s departure from the short-haul flight market will almost certainly… Read more

Boeing vs. Bombardier: Tariffs justified as Bombardier receives state aid

MarketLine

In September 2017, the US Department of Commerce announced the preliminary decision to implement import tariffs of approximately 220% on any imports of Bombardier’s C-Series jets into the US. Following a complaint by major competitor Boeing that Bombardier was dumping its jets into the US market as below cost-price, the tariff plan has met with widespread criticism across Canada – where Bombardier is based – and in the UK, where wings are built in a plant in Belfast, currently providing 4,200 jobs. In reality the tariff – which would more… Read more

UTC buys Rockwell Collins, hurting Boeing: New company will lead market and make conditions harder for Boeing

MarketLine

Having left the servicing market when the 787 Dreamliner program was created, Boeing announced a return earlier this year. Yet the much vaunted return – advertised as a means to save money in a toughening commercial jet airliner market – is likely to be harmed by the purchase of Rockwell Collins by UTC. The new company formed by the takeover will provide a service no other company is able to match fully. In making very public protests over the $30bn deal, Boeing is attempting to raise the interests of regulators…. Read more

NATO: Defense spending rises as members look to a future without US leadership

MarketLine

In a recent meeting of the North Atlantic Treaty Organization (NATO), between the defense ministers in June 2017, it was heard that almost across the board there has been an increase in defense spending. Despite the target of 2% of GDP that members are expected to meet, traditionally many members have ignored this target in order to grow their economies or recover after recessions, but there are more members now hitting this target. There are multiple explanations for why members are spending more on defense all of a sudden. Firstly,… Read more

HMS Queen Elizabeth: Britain’s largest ever warship launches, but it has some concerning flaws

MarketLine

The Royal Navy’s largest ever commissioned ship is launched ready for sea trials in June 2017. The Queen Elizabeth Aircraft carrier is over three times larger than the class it replaces the invincible class and has absorbed £6bn ($7.6bn) worth of investment and has taken around 10 years to come to fruition. There are a number of questions that surround the project however and in particular the military procurement process in the UK in general. There are concerns that there will not be enough crew ready to operate her, the… Read more

Iran Transport: Accelerating forward to the future

MarketLine

Iran is a growing hub for transportation, acting as a critical connection point between India and Russia/ Europe. Until recently, the Suez Canal served as the quickest transport route between India and Russia however with Iran undergoing rail infrastructure upgrades and also building part of the North-South corridor, Iran is set to become a key part of the ongoing development of transport links using the rail network. The North-South corridor has the potential to cut the transport time by around 50% and is sure to disrupt the naval transportation market…. Read more

Trump’s win is good news for US economy

MarketLine

Donald Trump’s whole mantra during his campaign (as evidenced by his rather natty headwear) has been to ‘Make America Great Again.’ In order to do this, he knows he must make the US competitive on the global stage. He has pledged to reduce taxes heavily for low and middle income Americans and also to make sure that the wealthy (including corporations) do not pay too much as that undermines jobs. This should help boost the currently questionable level of job creation and to increase spending power, which should in turn… Read more

COMAC C919 Airliner lands

MarketLine

When the COMAC C919 launched, comparisons were immediately made with the failed Bombardier effort to break the Boeing/Airbus duopoly. Bombardier failed for several reasons, chiefly because it was unable to gain the required customer base needed to gain traction in the airline industry. This does not apply to COMAC: the company has a ready-made market of state controlled airlines, colossal state backing and provides fantastic opportunities for foreign companies. These factors will aid the company to make serious inroads into the Chinese domestic airline market, providing the impetus for future… Read more

SpaceX: turbulent week for Elon Musk

MarketLine

September 01 2016 saw SpaceX (Space Exploration Technologies Corporation) hit the headlines after the explosion of one of its Falcon-9 rockets on the launch pad at Cape Canaveral. The incident, which occurred during a test launch, destroyed the rocket and its cargo – a $200m satellite. The explosion was the latest bad news in a turbulent week for CEO Elon Musk. Shares in Tesla Motors – where Musk is CEO and largest shareholder – dropped 5.3% after it announced it would need to raise additional capital before the end of… Read more

Airlines: strategies of the world’s largest carriers

MarketLine

Worldwide, airline passenger volumes have been increasing steadily for decades, with only the occasional temporary downturn. Air transport of both passengers and freight is vital for the globalized economy. In the BRIC countries and other emerging economies, personal incomes are rising and making air travel accessible to a greater proportion of the population. This ought to be a good time to be in the airline industry, right? Wrong. Airline profit margins are among the thinnest of any industry sector. According to IATA data, the global industry had an average operating… Read more

Airline seating patent demonstrates the importance of innovation to the future of passenger air transport

MarketLine

The recent filing of a patent by French manufacturing group Zodiac Aerospace for an innovative high density seating solution for single aisle passenger aircraft has caused a stir in the industry. By configuring the seats into an offset facing pattern, the space between seats is claimed to increase by 15%, offering each passenger an additional 10cm of available leg room. While the introduction of the seating is likely to be some way off, such innovation is indicative of the how the industry as a whole is seeking to meet the… Read more

Ryanair profits soar as evolution of business model delivers results

MarketLine

On Tuesday 26th May, Ryanair Holdings (Ryanair), a low-fares scheduled passenger airline serving 1,600 short-haul, point-to-point routes across Europe; announced a 66% year on year increase in net profit. The company’s growth is no surprise to Marketline- the evolution of Ryanair’s business strategy was extensively examined in a March 2015 Case Study,  Cheap but no longer nasty: evolution at Ryanair, which predicted Ryanair shareholders were set to benefit from a sustained period of strong cash generation, as the ‘Always Getting Better’ program  delivered continued growth in passenger volumes.  The program,… Read more

Amazon Web Services, revolutionizing cloud computing

MarketLine

Amazon Web Services (AWS) was developed alongside the online retail giant’s vast e-commerce from the world’s largest online retailer’s inception. Although having built its reputation and brand recognition on its retail operations, Amazon has gone on to expand its offerings into products and services as diverse as media, electronics and cloud computing. Responsible for over 4% of Amazon’s revenues in 2013, AWS has seen Amazon sink over 10 years of development and millions of dollars of investment into the world’s largest cloud service provider. Available in over 190 countries worldwide,… Read more

Boeing and SpaceX to launch astronauts: Bad news for Virgin Galactic?

MarketLine

The ISS was originally designed and tested to provide an operational lifetime of 15 years; this period passed in November 2013. In January 2014, NASA announced its intention to extend ISS operations until 2024, giving a new 26-year life span to the station. However, at the same time, NASA’s budget has been falling in real terms and the agency has had to develop new relationships with private enterprises, such as SpaceX, Orbital Sciences and Sierra Nevada, in an attempt to allow competitive forces to drive down the cost of rocket… Read more

Swiss reject $3.5bn Saab Gripen NG fighter deal in referendum

MarketLine

A referendum in Switzerland has seen a narrow rejection of the $3.5bn acquisition deal for next generation of Saab Gripen fighters. 53.4% of voters opposed the deal for 22 planes. Switzerland’s political process permits holding a plebiscite to reconsider a recently passed law if 50,000 signatures are collected. The Gripen had been selected in 2011, but had only reached Swiss Parliament approval in November 2013. The decision may have been due to considerations of neutrality, as Switzerland hasn’t deployed its military for over 200 years. In a recent crisis where… Read more

Israel heightens defense after rocket attack and amid Egyptian turmoil

MarketLine

Since the interception of a rocket launched allegedly from Sinai, and the growing instability in Egypt, the Israeli Defense Force (IDF) have bolstered their defenses by deploying a sixth Iron Dome battery near Eilat, which was the target of the rocket attack. The Iron Dome missile defense system has proven exceptionally effective in the past. During Operation Pillar of Defense in November 2012, five of the IDF’s Iron Dome batteries intercepted 86% of the 421 rockets aimed at populated Israeli areas. Israeli defense spending had a total budget allocation of… Read more

Rebel activity and drug trafficking cause South American government’s military budgets to explode

MarketLine

Introduction Global defense spending continues to grow, despite many developed nations implementing considerable cuts to their defense budgets as part of their austerity measures. Western Europe in particular has suffered, as the impact of the Eurozone crisis has been felt by many EU members. For many countries in Europe defense spending is seen as a politically ‘safe’ area to make cuts, particularly as operations in Afghanistan wind down. At the same time, North America is suffering from the US’ sequestration measures which resulted in a decline in spending in 2012…. Read more

Serco: A relatively unknown billion pound company

MarketLine

The UK based service company Serco, is a large services business entity that in popular UK media is a relatively low key and unknown business. Despite this the company is one of the key contractors in the UK and is widespread internationally. In 2012 the company turned over £4.9bn (approximately $7.4bn), with net income of £245.3m (approximately $374.2m) which is clear evidence of its scale and scope. Serco has an incredibly diverse business profile, but its key business area is providing governments with private sector contractor options, outsourcing essentially. The… Read more

Embraer targets the US

MarketLine

There is widespread disappointment with the recovery of the US economy, but the American economic stimulus is rendering more fruits then the fiscal consolidation packages undertaken by European governments. This is reflected in the difference in new business opportunities currently presenting themselves on either side of the Atlantic. During the economic free-fall of the developed world, the European and the American market shared a comparable decline in the Gross Domestic Product (GDP). However, the GDP in the US is showing a more robust increase than many European countries, with the… Read more

Embraer in the US market

MarketLine

According to the International Air Transport Association’s (IATA) financial monitor, airlines share prices were 3% higher than the FTSE Global All Cap in the first 4 months of 2013. Its share prices are outperforming the market as investors are optimistic about the short-term recovery of the industry. The recovery of the share price is particularly strong in the US. It has risen by 35% this year following the improved financial performance of the American airline companies after the implementation of restructuring plans. The combined net profit of the American airlines… Read more

Boeing: The 787 Dreamliner

MarketLine

In 2011, Boeing made the first commercial delivery of its 787 Dreamliner. It is designed to offer airlines enhanced fuel efficiency and long-haul capability in a mid-sized jetliner. This article shows that how Boeing responded to customer demand in order to make the Dreamliner a reality, and how its strategy differed from that of Airbus, its chief rival. Fuel is a major cost for airlines, and its price is likely to continue to rise. This is generating demand for fuel-efficient planes. Boeing’s new 787 was designed to offer ‘super-efficient’ fuel consumption…. Read more

EADS: Life after BAE? Flying High after the Failed Merger despite Challenges in the Defense Sector

MarketLine

The much vaunted merger of BAE Systems and EADS failed to materialize in October 2012 because of political deadlock, generating uncertainty regarding the future of both companies. The full results for the financial year 2012 show that EADS seems to be doing just fine. 2012 saw a 15% increase in revenues for the company, driving it to €56.5bn ($78.6bn) against 2011’s €49.1bn ($68.3bn). Airbus, Eurocopter and Astrium provided the boost, with defense remaining flat. Net income was up 20% to €1.9bn ($2.6bn). Order books were also up 5%. Shares peaked… Read more

Asia-Pacific and the Middle East & Africa Drive Growth in Defense Spending

  Defense spending continues to grow in 2011, with developed countries preparing to or already cutting their spending, and developing nations building their military capacity to match their economic power. Regional instability and changing security threats are the main reason for this growth. The global market expanded by 2.7% in 2011, to reach a value of $1.5 trillion, indicating a compound annual growth rate (CAGR) of 6.1% in the period 2007-2011. Personnel numbers declined with a compound annual rate of change (CARC) of- 1.6%, reaching a total of 12.5 million… Read more

Boeing 787 Dreamliner

Designed to offer airlines enhanced fuel efficiency and long-haul capability in a mid-sized jetliner, in 2011, Boeing made the first commercial delivery of its 787 Dreamliner. Boeing’s new 787 was designed to offer ‘super efficient’ fuel consumption. Innovations in airframe and engine design were critical to achieving an efficiency said to be 20% better than that of rival planes. Airbus is Boeing’s only significant competitor in jetliner production. The two companies have differing views of the future of air travel. Airbus considers that spoke-and-hub routing will continue to expand; Boeing… Read more