Aerospace Industry: A Comprehensive Outlook at the Growth

By CIOReview | Friday, August 3, 2018

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The ever-rising costs and potential disruption always plays a part in a company’s marketplace and one industry hugely impacted by radical change is the aerospace sector. According to the Aerospace Industries Association of Canada (AIAC), the rising cost and escalating trade war can have negative impacts on the industry.

For instance, Magellan Aerospace, one of the largest aerospace components manufacturers in Canada saw a decline in revenue growth with its US operations declining by 1.9 percent in 2018. The firm that manufactures aircraft engines and aerostructure components for aerospace markets witnessed a decline in net income by almost 50 percent. In another case, Heroux Devtek, a small-cap supplier who specializes in landing gear and actuation systems for the aerospace industry lost close to seven percent of shares on increasing trade tensions. After achieving a high of $16.75 per share in May, the sales decreased much like Magellan. In 2019, the company is looking at two major acquisitions, which will have a significant bump in sales and ROI.

Overview of the Market

Amidst increasing costs and negative market responses, the demand for aerospace components is expected to be robust. From some aspects, the skies may seem encouraging for the aerospace industry. However, despite the growing market, one cannot ignore the aftereffects of a trade war. Several market leaders in the industry have voiced their opinions over the high tariffs during trade wars.

The rise of air travel, a backlog of new aircraft orders and the constant resurgence of business aircraft will further add to the growth of this market. The demand has proliferated in aerospace and showing immense capacity for growth in the commercial industry. The other thing triggering the market is manned spaceflight. The future of aviation will encompass tourism in earth’s orbit, and we have already seen many excited people booking space travels.

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