Table of contentsIntroductionEmerging marketsGovernment involvementEnvironmental pressuresConclusionIntroductionThe European aerospace industry is booming. It is considered one of the key high-tech sectors in the EU, with a turnover of around €128 billion per year (Analysis). Since the founding of Airbus in the 1960s, Europe has become one of the main competitors in the global commercial aircraft market, taking on former world power Boeing and eventually overtaking them in terms of orders. Airbus and other European aircraft companies have enjoyed success both through globalization and the rise of domestic markets. Aerospace products manufactured in Europe are exported around the world, leading to an industrial trade surplus for the EU (analysis). In addition to selling overseas, Europe has a large market for commercial aircraft, with around 5,000 planes carrying 1 billion people each year via the European Air Transport System (FWC). Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”? Get the original essay The aerospace industry in Europe is largely concentrated in a few specific countries, namely the United Kingdom, France, Germany , Italy, Spain, Poland, and Sweden (analysis). These countries each focus on the contribution of certain major components (Analysis). For example, France specializes in cockpit technologies and assembly of wide-body aircraft while Germany focuses on the supply of avionics, fuselages and complex cabin equipment. This specialization allows countries to focus on their core competencies (Analysis). Although there are several players in the sector, Airbus is widely considered to be Europe's pride and joy within the industry (Analysis). Just as the US industry consolidated to become dominated by a few select players, so did the European industry (FWC). Since the 1980s, numerous mergers and acquisitions have reduced the number of major European aerospace companies from twenty-one to four (FWC). The other four include BAE Systems, Finmeccanica, Thales and a company previously named EADS (FWC). EADS stands for European Aeronautic Defense & Space Co. and is the former name of the parent company of Airbus (Michaels). The parent company recently dropped the EADS name and renamed itself Airbus Group NV (Michaels). Airbus is a French-German-British-Spanish multinational registered in the Netherlands that has enjoyed increasing market share in recent years (Michaels). As Airbus is revered as a hugely important European company, its success is celebrated by the industry. Although Boeing's orders in 2014 exceeded those of Airbus, the two world powers have clashed for most of the last decade, with Airbus slightly ahead (Trefis). Airbus' commercial aircraft orders in 2013 totaled 1,503, followed by Boeing with 1,355 orders (Trefis). In addition to orders, innovation is another competition, with Airbus recently overtaking Boeing as manufacturer of the world's largest civil aircraft thanks to the release of its A380 (Analysis). The Airbus A380 was the key to overcoming Boeing's monopoly and gave Europe its leading role in the market for very large civil aircraft (Analysis). Boeing predicts demand for wide-body commercial planes will reach 8,000 in the next two years. decades (Trefis). This represents a massive sales opportunity worth $2.3 trillion, meaning bothCompanies will continue to compete with Boeing's 777 and 787 Dreamliner models and Airbus' A330 and A350 models (Trefis). In the aircraft market, few regional aircraft manufacturers in Europe have been able to compete with emerging powers, notably the Brazilian Embraer and the Canadian Bombardier (analysis). The main exception is the Franco-Italian company ATR which holds the title of the world's leading manufacturer of regional aircraft (Analysis). Furthermore, European companies are failing to play a significant role in the market for small business and general aviation aircraft, with this market being largely dominated by American companies (analysis). The main exception in this market is the French company Dassault, which has sold more than 8,000 aircraft since 1945 (Vision). Outside of manufacturing complete aircraft, many European companies serve as tier one suppliers to major manufacturing companies (Analysis). For example, the British company Rolls Royce and the French company Snemca produce 40% of the world's engines (analysis). With Airbus leading the large aircraft market, some companies operating in the small aircraft markets, and many companies supplying parts to aircraft manufacturers, Europe is certainly leading in the global aerospace industry. Emerging Markets The aerospace industry in Europe is poised to experience a decline in market dynamics over the next two decades due to emerging economies in China, Russia and India. For decades, the French company Airbus has held the majority of market share in the sector, alongside the American leader Boeing. Together they represent around 80% of the total market share (Commission). With other supplier markets emerging in low-cost countries, Airbus faces a problem of increased future competition. This section will describe the current emerging market trends in the aerospace industry and how these emerging markets of China, Russia and India will become competitors in the global market by 2020. Emerging markets will represent a major source of demand for commercial aircraft over the next two years. decades, in the same way that these same emerging markets currently represent only a small part of the aerospace industry's supply needs (Bedier). Investments in emerging markets have short-term advantages, such as low labor costs and looser regulations, but local governments have begun to follow a set of strategies that will help them become leading companies in the future (Bedier). For these emerging markets to become global competitors, they must achieve the following goals: Make the aerospace industry a priority in government funding Have a single integrated player in each emerging market Develop a large pool of capital Create partnerships with manufacturers of original equipment (OEM) to create a global supply chainCurrent globalization of the industry is minimal due to the complexity of the industry's technology, differences in regulatory and safety requirements and the importance of protecting intellectual property. This complexity pays off in the long term, showing a decrease in total spending on investing in emerging markets that is 20-25% lower than using manufacturers in high-cost countries (Bedier). The European aerospace industry will need to redouble its efforts to stay ahead and develop new and innovative products for global markets. By comparing the advantages and disadvantages of each of the three emerging markets, the marketsChinese and Russian turn out to be the main competitors by 2020. They now manufacture structural components for industry leaders Boeing and Airbus. The Chinese aviation industry (AVIC I) has not only started partnering with OEMs in the supply chain, but also benefited from enough government funding to develop a competitive regional aircraft, the ARJ21. In contrast, Russian markets have yet to create a single integrated player in their local market. In conclusion, as a growing economy, China's success will depend on its ability to understand global requirements, design a compelling and reliable aircraft and develop programs. management, supplier onboarding and after-sales support (Bedier) capabilities. If all this is true, by 2020, China will become the first tier-one supplier of aeronautical components and occupy leadership in the aerospace industry. a successful product and have enough buyers. Research has shown that a company must sell 500 units of an airplane it builds to break even after all the development and manufacturing costs it spends, but this rarely happens (Eberstadt). Therefore, in order to ensure that planes are continually built and improved, national governments are finding ways to help European aerospace companies stay in business and remain competitive. Government assistance starts right at the beginning, with the supplies that go into making planes. Aerospace companies source primarily from American suppliers, but government support for European suppliers encourages competition throughout the global market (Eberstadt). Competition encourages lower prices, which reduces costs for aerospace manufacturers who buy the supplies and helps European suppliers. Manufacturers are then able to maintain lower costs throughout the process and pass them on to buyers. Although an expensive process, aerospace manufacturers are encouraged to participate in research and development because governments help fund projects for which it might be more difficult to raise capital initially. 'future. private sector (Eberstadt). By being able to worry less about how to start a project, aerospace manufacturers can act more responsive to market needs and opportunities and increase their competitive advantage. This mindset allows aircraft manufacturers to continually improve their products and processes, and continue to succeed. European governments are involved not only in the aerospace industry, but also in the affairs of airlines, many of which are identified as "national" airlines of European countries. . Governments help ensure that aerospace manufacturers find buyers for their planes by taking the process a step further and influencing airline purchasing decisions (Eberstadt). This is an effective way to reduce the risks that aerospace manufacturers face when making development decisions. Finally, European governments have always felt a sense of identity and pride in their history of success in the aerospace industry (Eberstadt). Since World War II, manufacturers have provided many jobs to countries such as France, Germany and the United Kingdom. The aerospace industry has become an integral part of the economies of these countries, and their success is so important to governments that it has been said thatFrench officials would approach Airbus to ask: “How can we help them? instead of the company having to go to the government (Eberstadt). The success of the aerospace industry in Europe can lead to more jobs, some of which are lost, in companies in other countries and increase Europe's competitiveness. The aerospace industry has always been important to European economies and its national governments will likely always find ways to support its success. Environmental pressures In recent years, there has been increasing pressure on the aerospace industry to be more aware of its impact on the environment. Various organizations such as the Federal Aviation Association, the Environmental Protection Agency, and the International Civil Aviation Organization design goals, propose regulations, and help transition to more environmentally friendly business practices. Examples of these initiatives include the Destination 2025 strategic plan, ATM research in the Single European Sky and the Emissions Trading System. These projects aim to create more sustainable business processes without hindering the financial success of companies. The Destination 2025 strategic plan, designed by the Federal Aviation Association, set goals focused on renewable fuels and the industry's effect on the health of citizens around the world. Destination 2025 hopes to discover alternative fuels for leaded aviation gasoline and use one billion gallons of these fuels by 2018 (Destination). Additionally, the plan aims to reduce the contribution of aviation emissions to significant health impacts by 50% (Destination). Single European Sky ATM research, on the other hand, aims to optimize aircraft trajectories, which would in turn lead to higher overall energy efficiency (Environment). SESAR intends to reduce aircraft emissions, while also helping airspace users benefit from lower fuel expenses. The Emissions Trading System contributes to these efforts by working to implement a cap-and-trade system within the European Union. By allocating emission “quotas”, the ETS should lead to a reduction of 43% between 2005 and 2030 (emissions). In order to achieve so many ambitious goals and continue to see statistics comparable to them, companies are dedicating funds to research and development. to the cause and also find help from sources like the International Civil Aviation Organization. ICAO consists of 191 Member States and works with businesses to facilitate the transition from traditional fuels to alternative fuels by cooperating with financial institutions to help fuel projects aimed at creating a more sustainable industry (Vision and Mission). Within the organization is the Aviation Environmental Protection Committee, dedicated to analyzing future trends and exploring options that utilize or combat potential opportunities and obstacles (Vision and Mission ). Thanks to these initiatives, total observed emissions of carbon monoxide since 1970 have decreased by almost 64%, those of sulfur dioxide by 83% and those of volatile organic compounds by 48% (NEI). Many of these emissions decreases can be attributed to innovative thinking and more advanced technology. Companies like Boeing and Airbus are competing to create new energy-efficient prototypes that will be used in the near future. Airbus devotes around 90% of its research and development budget to environmental research.