5 must reads for airplane enthusiasts

This week saw the return of Farnborough International Air Show, the first time since 2018, so we’ve kept an ear to the ground for the aerospace-related stats, insights and discussion points you need to feel in the know.

1. Plant powered

As a major source of carbon emissions, the commercial aerospace sector can make an enormous impact through operational improvements, sustainable aviation fuel (SAF), new propulsion technologies (such as electric and hydrogen) and global market-based measures like carbon offsets. SAF could represent the most immediate solution currently available to reduce the climate impact of the aviation industry. The development of the SAF value chain is a priority, though. Obstacles at each value chain stage (feedstock, production and infrastructure) need to be tackled to make SAF a viable option and a new normal post-2030. Who knows, one day you could be travelling on a plane fuelled by cooking or plant oils, municipal waste or agricultural residues.

Future of the commercial aviation industry

2. One thing after another

Pre-pandemic, aerospace suppliers were already enduring several challenging market forces. Order delays and cancellations followed; declining demand for widebody aircraft; inventories of unfinished aircraft piled up, heaping additional stress on an already weakened value chain. Then COVID-19 hit. Air travel all but stopped and airlines around the world announced even more order cancellations or delays. Production across all aircraft segments halted, leading to large-scale layoffs and furloughs, plant closures, and divestitures. The pandemic transformed a difficult situation into an existential crisis for aerospace suppliers. So much so that industry analysts have projected that 20% of lower-tier aerospace and defense suppliers will exit the sector before March 2023. A return to “normal” life is on its way but there is little doubt that the aerospace competitive landscape will remain challenging for months or maybe even years to come, and distress in the supply chain must be addressed immediately.

How to survive and revive amid commercial aerospace supplier distress

3. Is it a bird? Is it a plane? No, it’s a flying car!

Flying cars will soon be a thing — no, really — in a concept called advanced air mobility (AAM). Advancements in electric and autonomous vehicles have sparked renewed excitement about the integration of battery power in aviation, and billions of dollars have been invested to develop highly maneuverable electric vertical take-off and landing aircraft. The stepping-stones exist today in the form of drones integrated with AI. Comprehensive regulatory and operational frameworks and ground infrastructure planning hold the key to unlocking broad commercial applications for AAM. But with a wide variety of aircraft classes and business models vying for dominance in an emerging market, it will take time for the true shape and scope of AAM to become clear.

Reshaping the long-term future of commercial aviation

4. Aerospace is ahead of the curve

Businesses in the industrial sector are taking steps to restructure their supply chains and remain competitive in the face of these massive external forces. 62% of industrial companies say they have made significant changes to their supplier base and 53% say they have already near- or re-shored some of their operations in the last 24 months. Approaches vary based on relative value chain positioning, operational complexity and political sensitivity. For instance, aerospace and defense companies are somewhat ahead of the curve with shorter, domestically oriented supply chains, given the sensitive nature of defense technologies. However, they continue to shift production closer to demand hubs to further improve resiliency, while employing technologies like additive manufacturing (AKA 3D printing) and automation to preserve margins.

Why global industrial supply chains are decoupling

5. Using data analytics to cut emissions

An aircraft engine original equipment manufacturer focusing only on its traditional position in the aerospace supply chain might limit its environmental efforts to designing more efficient engines. However, one leading manufacturer recognized an opportunity to add economic and sustainability-related value outside this lane by using sophisticated data analytics and machine learning. In partnership with a cloud computing provider, the company helps airlines analyze data collected by hundreds of engine sensors during each flight. The resulting insights help them operate their aircraft more efficiently and minimize downtime via more targeted preventive maintenance. The firm estimates that this program has helped avoid over 22 million tons of carbon emissions to date — while also providing an important recurring revenue stream.

How industrial leaders can use sustainability to create value

If you do one thing:

Appreciate your natural instincts. Something that comes naturally to you may be something others spend years learning.

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