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Internal Factors

Strengths

France ASD Industry

  • Ecosystem characterized by high levels of cooperation, particularly in R&D activities: coordinated approach by CORAC (1), virtually all stakeholders are members of GIFAS (2)
  • World-leading anchor companiesacross value chain segments (e.g., Airbus, Thales)
  • Best-in-class Aerospace cluster supporting the local industry
  • High collaboration between prime contractors and their suppliers allows for enhanced innovation potential
  • End-to-end manufacturing and integration capabilities

Germany ASD Industry

  • Strongly interlinked R&D environmentbetween universities, research institutions and industry
  • European leader in aircraft cabin interiors capabilities
  • Extensive and wide-ranging aeronautics ecosystemincludes airport management (e.g., Hamburg Airport)
  • Large, diversified and competitive domestic market
  • European leader in developing lean and efficient manufacturing techniques and processes
  • Innovation capabilities (e.g., technology, funding, processes)

UK ASD Industry

  • Strong capabilities in wings, propulsion systems and aero-structure parts manufacturing and integration
  • World leading players in engine manufacturing and integration
  • Best-in-class engineering schools
  • Strong apprenticeship and graduate programmes and public funding for up-skilling of staff

Canada ASD Industry

  • World leader in civil flight simulator production, turboprop and helicopter engine production
  • Well developed business and regional civil aircraft production supply chains, built around an OEM
  • R&D investment in the aerospace industry seven times higher than local manufacturing average
  • Developed cluster structure with Aero Montreal having a central role in connecting industry stakeholders
  • World’s largest global Boeing suppliers base

Weaknesses

France ASD Industry

  • Military segment facing cuts in defense budget(e.g., fighter planes) under the Military Programming Law
  • Labour shortage of qualified technical manual workers
  • High government influence in privately-owned players (4):Government frequently resorts to public subsidies and procurement procedures
  • Heavy local taxation schemes limit profitability of domestic players and reduces global competitiveness
  • Limited local demand and high dependence on exports

Germany ASD Industry

  • Labour shortage of skilled workers in the fields of technology, research and services
  • High fragmentation level: more than three quarters of aerospace players are SMEs
  • Decreasing demand from the national defense sector
  • Macroeconomic stability behind lowest interest rates in Europe
  • Growing public budget constraints reduce R&D in the defence sector
  • Low ability to form risk-sharing partnerships

UK ASD Industry

  • Limited funding opportunities for later-stage product development
  • Lack of a nationwide cluster
  • Shortage of skilled manufacturing engineering skills
  • Lack of a true global UK-based OEM
  • Lacking certified capabilities in surface treatmentis a blottleneck for the entire supply chain
  • SMEs build around technical innovations, but lacking management, financial and supply chain expertise

Canada ASD Industry

  • Lagging behind in advanced technology capabilities(e.g., production automation) and Industry 4.0 adoption
  • High dependency on exports, especially to the US and France
  • Totally dependent on imports for large passenger aircraft
  • Shortage of skilled workforce for industrial mechanicals, welders and manufacturing managers
External Factors

Opportunities

France ASD Industry

  • BoostAerospace platform, focusingon improving collaboration across the supply chain
  • High order backlog will continue to drive demand from OEM and Tier 1 players
  • Large orders and heterogeneous customer base absorb the cyclical effects
  • Rising demand for commercial aircraft from Asia among worsening US-Asia trade relations

Germany ASD Industry

  • Large and highly developed aviation sector
  • Brexit poses an opportunity if Airbus UK decides to move part of the wings production supply chain to Germany
  • OEMs and Tier 1 players reducing vertical integration and shifting responsibilities into the downstream supply chain
  • Recent increase in the number of Tier 2 and reduction of Tier 3 suppliers shows movement into the upstream supply chain
  • Know how transfer through diversification (e.g., automotive)

UK ASD Industry

  • Increasing qualification levels by workforces in emerging countries represents an opportunity for outsourcing high-labour, low complexity product manufacturing
  • Future aircraft programmesrequiring capabilities aligned with new technologies (e.g., electric propulsion systems, composite materials)
  • Solid public support for early stage technological innovation and product development (e.g., Research Council grants)
  • Possible positive impact from Brexit to emerging UAV sector due to less stringent regulatory context

Canada ASD Industry

  • Acess to Pacific Northwest aerospace anddefense markets
  • Government-sponsored initiatives to increase Industry 4.0 adoption by SMEs (e.g., shared resource centres)
  • Special member of the European Space Agency
  • Provide components to OEMs expanding to emerging growth markets (e.g., Bomabardier-Comac partnership)
  • Government support to develop a regional ecosystem for commercial and civil UAS and a centre of excellence

Threats

France ASD Industry

  • Aircraft OEMs moving into the MRO segment due to LCCs (3)closing down for financial reasons or leasing contacts
  • Increasing competition from emerging countries with lower labour costs for MRO and lower-tier subcontracting (e.g., Brazil, China, India)
  • Airbus looking to insource production of some systems (e.g., nacelle) to increase aircraft performance
  • Protectionist measures and developing domestic industries in emerging countries(e.g., Russia, China)

Germany ASD Industry

  • Heavy dependence on importing goods from US-based aerospace industry
  • Heavy dependence on a single OEM and a few Tier 1 suppliers poses a significant exposure to risk by SMEs
  • SMEs lacking scale and internationalization capabilities lose competitive advantage versus players from emerging markets

UK ASD Industry

  • Post Brexit regulatory regime could result in dual certification requirements, increase costsand discourage investment in UK
  • Brexit to drive down supply chain efficiency, as the majority of parts manufactured in the UK are assembled in the EU
  • Brexit could reduce high skilled workforce mobility, a critical aspect of the industry
  • Lack of lean process capabilities hinders productivityand reduces global competitiveness versus low-cost markets

Canada ASD Industry

  • Competitive pressure on market consolidation
  • Supply chain globalization has reduced the advantage Canadian players once by belonging to Bombardier supply chain
  • Civil aircraft MRO players pressured by OEMs wishing to retain share of a high-margin activity and low-cost MRO providers from emerging markets
  • Uncertain US-Canada trade relations and rising US protectionism