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Executive Summary
Australia is traditionally a major user of civil and military aviation equipment. Its population of just over 25 million is mostly concentrated along the east coast with additional hubs along the southern and southwest coasts. As Australia is physically the same size as the continental United States, this has made aviation an essential feature of the commercial, military and recreational sectors since the earliest days of powered flight. Australia’s commercial aviation sector is led by QANTAS, one of the world’s oldest and most respected airlines, and its air force is one of the most modern in the world. In fact it is regarded as the world’s first all fifth generation air force flying mostly US-origin aircraft. Boeing has its largest presence outside the US in Australia. Australia has a civil helicopter fleet in excess of 2000, one of the largest worldwide, and has a vibrant UAV sector. Australia also has a small but growing space sector with two small launch centers under development, a national space agency and a dynamic space star-up community. Historically Australia ranks as a top 20 market for commercial aircraft and a top 5 market for military equipment with aircraft the largest component. While civil and commercial aviation has been heavily impacted by travel restrictions instituted during 2020, the defense sector has continued to perform strongly with a new ten year, USD 190 billion acquisition strategy announced in July 2020. Australian defense companies are also prominent investors in the US, with offices and manufacturing facilities in over thirty US states. Australian aerospace companies also manufacture critical components in Australia for both the Boeing 787 Dreamliner and the Lockheed Martin F35 Joint Strike Fighter.
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Market Entry
Australia and the United States have had a Free Trade Agreement in place since January 2005. Australia relies extensively on US-made aircraft of all types and sizes and many of the major companies active in the Australian aviation sector are US subsidiaries or US-owned. The Avalon Airshow is the major showcase of the aviation industry and is traditionally held every February in odd-numbered years, alternating with the Singapore Air Show which is held in February every even-numbered year. Due to international travel restrictions disrupting aviation in particular in 2020, Avalon and indeed most other trade events have been rescheduled to later dates in 2021. Avalon is one of the world’s largest airshows with many aircraft on display and flying during the event. It also features an extensive conference program featuring MRO, UAVs, airports and space. Avalon also includes a large US Pavilion and a US Investment Seminar featuring various US states pitching to aviation companies looking to establish a presence in the US. Avalon is a platform not only for the Australian market but also the wider Indo Pacific market and buyers and delegations from across the world attend.
Rotortech and Land Forces offer particular additional promotional opportunities for rotorcraft and UAVs and AFAC 2021 is the event to attend and exhibit at in terms of aerial fire-fighting.
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Current Market Trends and Demand
Very limited in the civil aviation sector given the imposition of international and domestic travel restrictions in mid 2020 for air travel within as well as to and from Australia and the consequential impacts on commercial airlines, hotels and the tourism sector broadly. Passenger services mostly ceased nationwide with some refocusing on air cargo to support export markets. Most aircraft are sitting idle and many have been placed in storage at facilities in central Australia and the western US until demand recovers. Second largest airline Virgin Australia collapsed in April 2020; was placed into voluntary administration and subsequently bought by a US-led consortium headed by Bain Capital in June 2020. As short term government financial assistance across the Australian economy is progressively terminated, it is expected that air services will be reinstituted during 2021. There has been some positive expansion domestically in 2020 but on a limited scale.
Defense remains the one major bright prospect with the July 2020 Defence Strategic Update announcement of a ten year, USD 190 billion defense acquisition program. The Update is accessible online at www.defence.gov.au . Historically the US supplies the majority of Australia’s civil and military aviation needs. Approx one-third of this investment is directed at aviation capabilities including remotely piloted and/or autonomous combat aircraft; expansion of the Jindalee radar network; replacement and expansion of airborne electronic attack capability upon retirement of the EA-18G Growler; ground control systems; expanded replacement fleet for the C-130J Hercules aircraft to improve lift capacity; expanded replacement fleet for KC-30A air-to-air refueling aircraft, including crewed and/or remotely-piloted platforms; decontamination equipment for aircraft and air bases in the event of attack; infrastructure enhancement for Australia’s northern bases to improve capability and survivability; new long range helicopters for the army; plus USD 5 billion for space initiatives and USD 10 billion for various cyber initiatives across the Australian Defence Force.
A major inquiry is underway into the national response to the Australian bushfire crisis during the 2019/2020 summer. It is widely anticipated that the inquiry will result in recommendations for better preparation at national and state level, including increased investment in systems to fight and prevent future severe fires. US companies have been active in fighting bushfires in Australia over many years and this may well open up additional substantial opportunities.
Helicopters and UAVs are widely used across the Australian economy particularly in support of the agricultural, mining and energy industries and that should continue but tourism-related services are experiencing a substantial reduction in demand. This will ease as and when domestic and international travel restrictions are relaxed by the Australian Government and the respective state and territory governments. Border security remains a very high priority and this can be expected to increase to enable greater control and awareness of passenger and cargo movements.
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Trade Events
Land Forces 2021, 1-3 June 2021, Brisbane, Queensland
https://www.landforces.com.au/
Rotortech 2021, June 2021, Brisbane, Queensland
https://www.rotortech.com.au/
AFAC 2021, 17 – 20 August 2021, Sydney, New South Wales
https://www.afacconference.com.au/
Australian International Airshow 2021 (‘Avalon Airshow’), 23 – 28 November 2021, Geelong, Victoria
https://www.airshow.com.au/airshow2021/index.asp
Australian Airports Association annual conference and trade expo, TBA but likely late 2021
https://airportsconference.asn.au/
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Doug Hartley
Embassy/Consulate Location:Canberra
International Trade and Investment Commercial Specialist
Doug.Hartley@trade.gov
+61-434-683-392
