Aerospace Defense Market Resource Guide - Poland

Poland - Aerospace & Defense

Take advantage of our market research to plan your expansion into Thailand’s aerospace and defense market. This guide includes information on:

Current market needs
The competitive landscape
Best prospects for U.S. exporters
Market entry strategies
The regulatory environment
Technical barriers to trade and more

Aerospace Defense Market Resource Guide - Poland

Copy Link

Executive Summary

Aerospace

Poland has an over hundred years of aviation history and a tradition of more than eighty years in the aerospace industry, aircraft production and aviation personnel training. Strong scientific, academic and engineering environments played a key role in the development of this sector. The end of the Cold War brought about a rapid decline in the industry as orders from former Eastern bloc countries dried up. The situation began to improve in the late 1990’s as a result of economy transformation. The expansion of international cooperation and direct foreign investments made the further development of the sector possible. Currently, the Polish aerospace industry has a rich export offer of advanced aviation products. Almost every passenger aircraft in the world features at least one component that has been produced in Poland. Since November 2012, Poland became a member of the European Space Agency and participates in many international scientific and technological projects.

According to Polish aerospace industry sources, there are over 150 aerospace manufacturers in Poland, employing over 25,000 workers, with total annual industry revenues of about $1.93 billion in 2018. Based on the U.S. Department of Commerce statistics, 90% of Poland’s aerospace production is exported. Prominent Polish aerospace manufacturers are owned entirely or substantially by parent companies in the United States and Europe.

Poland is known for the production and servicing of:

Light sport, passenger, agricultural and training aircraft;
Helicopters;
Gliders;
Parts and accessories.

Much of the country’s aerospace production is concentrated in the southeastern part of Poland in an area known as “Aviation Valley” (http://www.dolinalotnicza.pl/en/). When established in 2003, this industry cluster consisted of 18 companies with total revenues on the order of $270 million. Currently, the Association consists of 158 entities from the region.

U.S. manufacturers are well represented in Poland and include such firms as Sikorsky, Pratt & Whitney, Goodrich, Raytheon, Lockheed Martin and others.

Civil Aviation

During the past several years, the civil aviation sector in Poland has undergone many changes concurrent with the country’s accession to the European Union in 2004. The liberalization of Poland’s air transportation industry and implementation of the “open skies” agreement as of May 1, 2004, created a new operating environment and increased competition, and was resembled, among others, in the dynamic growth of the market. Between 2004 and 2008, Poland boasted one of the fastest annual growth rates of passengers served worldwide. It was in this period that two significant structural changes of the Polish aviation sector occurred. First, low-cost airlines gained footholds and then expanded their operations, thus adding to the global growth of passengers. Second, passenger traffic at Poland’s regional airports increased at a much higher rate than at the Chopin Airport in the capital city of Warsaw, even if the latter remained the country’s largest facility of this kind.

Poland’s current airport network consists of one central airport (Warsaw Frederic Chopin), one regional central airport (Krakow Balice), 13 regional airports, and in addition several small airports, sporting and training airports owned by the Polish Aeroclub, a number of post-Russian military airports, and a few facilities owned by manufacturing enterprises. The number of passengers passing through Polish airports has been growing significantly last years. In 2019, nearly 50 million passengers traveled through the Polish airports.

With more than six percent of growth in 2019, the Warsaw Chopin airport is a country leader in passenger flow. This position was achieved mainly by contribution of LOT Polish Airlines, owned by the State Treasury, which served 18.9 million passengers in 2019. Regional airports are also fast growing with a large increase in passenger number and extended development plans.

Due to a substantial increase in air passenger traffic in Poland, and capacity of Poland’s largest airport (Chopin Airport), the government announced the plan to construct the Solidarity Transport Hub (STH), a brand-new international airport, located approximately 25 miles from Warsaw. The project is scheduled to be completed in 2027. In according to government plans, new airport should handle 45 million passengers with the prospects of servicing up to 100 million travelers annually.

Size of Polish airports- passenger traffic and aircraft movements in domestic market in scheduled and charter service in 2017 – 2019.

Origin Airport	2019	2018	2017	2019/2018	2019/2017
1. Warsaw Chopin Airport
passengers	1 758 286	1 752 184	2 093 527	0,3%	-16,0%
movements	26 983	26 359	28 114	2,4%	-4,0%
2. Kraków – Balice
passengers	525 602	495 505	453 981	6,1%	15,8%
movements	6 466	6 505	6 352	-0,6%	1,8%
3. Katowice – Pyrzowice
passengers	150 982	145 836	102 143	3,5%	47,8%
movements	3 130	3 246	2 433	-3,6%	28,6%
4. Wrocław – Strachowice
passengers	346 815	313 837	537 109	10,5%	-35,4%
movements	4 711	4 617	6 241	2,0%	-24,5%
5. Poznań – Ławica
passengers	201 299	184 256	166 647	9,2%	20,8%
movements	3 317	3 191	2 936	3,9%	13,0%
6. Łódź
passengers	13	0	5	-	160,0%
movements	15	14	7	7,1%	114,3%
7. Gdansk Lech Walesa Airport
passengers	428 957	413 295	637 439	3,8%	-32,7%
movements	5 541	5 495	7 534	0,8%	-26,5%
8. Szczecin – Goleniów
passengers	216 823	236 975	203 001	-8,5%	6,8%
movements	2 517	2 781	2 476	-9,5%	1,7%
9. Bydgoszcz
passengers	6 653	0	0	-	-
movements	176	0	0	-	-
10. Rzeszów – Jasionka
passengers	217 010	220 731	198 858	-1,7%	9,1%
movements	3 295	3 245	2 955	1,5%	11,5%
11. Zielona Góra – Babimost
passengers	27 848	20 852	17 016	33,6%	63,7%
movements	820	586	525	39,9%	56,2%
12. Warsaw / Modlin
passengers	185	340	0	-45,6%	-
movements	93	58	9	60,3%	933,3%
13. Lublin
passengers	36 989	7 165	0	416,2%	-
movements	748	171	0	337,4%	-
14. Radom – Sadkow
passengers	0	0	4 412	-	-
movements	0	0	221	-	-
15. Olsztyn-Mazury
passengers	6 630	0	4	-	165650,0%
movements	138	0	2	-	6800,0%
Total
Total passengers	3 924 092	3 790 976	4 414 142	3,5%	-11,1%
Total movements	57 950	56 268	59 805	3,0%	-3,1%

Note: transit passengers as well as general aviation passengers and operations are excluded
Source: Civil Aviation Authority of Republic of Poland, data obtained from Polish airports, April 2020

The Civil Aviation Office (www.ulc.gov.pl) is the primary Polish civil aviation authority, and falls under the authority of the Ministry of Infrastructure and Development

Defense

Due to the sensitive nature of the defense industry sector, there are no official statistics available on local production, imports, and exports. The only data available through public sources is the annual amount of defense expenditures, indicated in the table below.

Spending on Defense in Poland

Year

2015

2016

2017

2018

2019

2020

Approximate Defense Spending

$ billion

10.30

9.8

9.5*

10.1

12.5

Source: Ministry of Defense (MON) – Annual Budget
*Please note that the value of the USD increased in 2016

The Polish Government annually negotiates its defense budget and the budget parameters are set during these negotiations. In the 2020 budget, the Polish government allocated 2.1% of 2019 GDP (the government has announced its intent to increase spending up to 2.5% of GDP by the year 2030), an amount equal to about $12.5 billion** (PLN 49.997 billion) for total defense expenditures, of which about $12.25 billion** (PLN 49.015 billion) is dedicated to national defense. This is a y-o-y increase of 11.3% and includes $3.35 billion (PLN 13.413 billion) allocated for arms and technical modernization.
**based on the current exchange rate: 1 USD = 4.0 PLN

Poland’s military is undergoing changes designed to transform it into a more capable, mobile, and NATO-compatible force. Change is occurring in every area of operation, to include force structure, staff organizations, training programs, doctrine, and security procedures. Modernization plans include improvement of troop capacity/mobility and air defense systems and further development of a professional army. Poland leads the former East-Bloc countries in transforming from Soviet-era equipment to modern NATO platforms. The total for 2020-2035 modernization plan is estimated at $133 billion.

2020 Modernization Plan spending includes:

Air Defense Systems - including further supply of Piorun missiles and Poprad missiles; beginning supply of Pilica rocket-artillery systems; and continuation of financing Wisła medium-range anti-aircraft and missile system (IBCS/Patriot system)
C4ISR System Integrated support and command systems and C4ISR battlefield imaging
Combating threats at sea
Modernization of Armored and Mechanized Forces including continued modernization of the Leopard 2 tanks to the 2PL standard
Imaging and satellite recognition
Individual soldier equipment and armament TYTAN
Modernization of Rocket and Artillery military units - including Regina artillery modules with Krab self-propelled howitzers, Rak self-propelled mortars, and continued funding of acquisition of Homar multi-rocket launchers.
Simulators and trainers
AJT training aircraft
Rosomak program
Spike precision weapons antitank missile

These programs will cost nearly USD 1.43B. The additional USD 1.76B will be spent on F-35, C-130H Hercules transport aircraft, guided air-to-ground missiles and short- and medium-range guided air-to-air missiles for F-16C/D, high mobility vehicles for aero-mobile troops, engineering support works for the EOD/IED mission, individual armament, night vision and optical equipment, IT equipment and software, modernization of Orkan rocket ships, BPz-2 armored tractors and NUR-12 radar stations, and modification of BWR-1S/D vehicles.

The modernization plan is based on three principles: 1) assessment of Polish military needs, 2) timeframe for delivery of equipment, and 3) Polish industry participation. The implementation of the program has placed an emphasis on using Polish defense industry capabilities, especially the Polish Armament Group (PGZ) companies. U.S, companies are encouraged to work with Polish defense companies seeking cooperation agreements or joint venture opportunities that, combined with the relatively lower cost of production in Poland, will be attractive to potential customers.

Poland leads the former East-bloc countries in parting from Soviet-era equipment and has long term plans to replace any remaining Soviet era equipment with modern NATO platforms. However, the Polish Government’s plans to strengthen and reorganize the armed forces and the Polish defense industry must compete with other reforms that are financed through the state budget.

End of tab panel

Copy Link

Market Entry

U.S. companies interested in the Polish market should contact our office located in Warsaw, Poland. The companies should also consider cooperation with Dolina Lotnicza (Aviation Valley) http://www.dolinalotnicza.pl/ ), a cluster’ of suppliers in the South-Eastern part of Poland. This organization has proven to be very effective in reaching out to the industry in Poland and abroad.

Networking opportunities within the supply chain arise from initiatives of the Dolina Lotnicza, as well as individual events organized by large aerospace investors in Poland, such as Pratt & Whitney and Sikorsky.

Since Poland is a member of the European Union, the same duties apply in Poland and the EU. Most aerospace products enjoy zero custom duties. In order to find specific duty, please look at: https://ec.europa.eu/taxation_customs/customs_en. In addition to the custom duty, the 23% VAT applies in Poland, calculated on CIF value of product.

End of tab panel

Copy Link

Current Market Trends and Demand

The most important trends observed in the civil aviation sector include the growing number of passengers of low-cost airlines, and a growing number of passengers at regional airports (versus Chopin Airport in Warsaw).

End of tab panel

Copy Link

Opportunities

The next years should bring a technological leap among Polish companies and an increase in the presence of foreign companies in Poland. Currently, technologies of printing components in 3D using metals, implementation of new solutions in engines and aircraft transmissions or created software for engine control are already being developed in Poland, financed through European Union funds.

Best prospects for U.S. companies include:

Aircraft parts and components;
Airplanes;
Avionics;
Fuel efficiency;
Noise and emission reduction technologies;
Safety and security equipment.

End of tab panel

Copy Link

Trade Events

Aerospace & Defense Meetings – May 18 – 20, 2021, Rzeszow, Poland http://poland.bciaerospace.com/;

MSPO International Defense Industry Exhibition – September 8 – 11, 2020, Kielce, Poland, https://www.targikielce.pl/mspo.

End of tab panel

Copy Link

Contact

Jolanta Mojsa
American Embassy Poland / U.S. Commercial Service Warsaw
Trade Specialist/Aerospace
Jolanta.Mojsa@trade.gov
+48 22 625 4374

Zofia Sobiepanek - Kukuryka
American Embassy Poland / U.S. Commercial Service Warsaw
Trade Specialist/Defense
Zofia.Sobiepanek@trade.gov
+48 22 625 4374

End of tab panel