Australia - Country Commercial Guide
Aerospace

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-08-16

Overview

Aircraft manufacturing and repair services in Australia generated revenue in excess of US$2 billion in 2020, reflecting a substantial decline of approximately 45% in total revenue from a peak in 2015-16.  The decline has been apparent each year since 2015-16 and is driven by a mix of factors including cheaper offshore options and also a preference to centralize some maintenance, repair and overhaul (MRO) activities overseas in the U.S.  Exports have been climbing modestly but steadily until 2020-21 when they fell substantially by some 35%. Imports had been increasingly steadily also until 2020-21 when they fell by 20%.

Overall, it has been a long term trend of declining local MRO activity with a growing reliance on imports, interrupted only by the worldwide downturn in the aviation sector in 2020. However forward projections point to confidence in domestic aviation travel returning to full capacity in 2022 and a shift in industry focus towards ordering smaller aircraft.  Despite international travel being the most negatively impacted and unlikely to return to full capacity for some years, Australian airline fleet upgrades will likely result in continued high imports, especially as airlines led by Qantas focus on trialing ultra long-haul flights. Lightweight parts made of composite materials may also be a bright spot as they can lift aircraft fuel efficiency.

The U.S. is the largest export market and total exports are estimated to account for over 60% of industry revenue in 2020-21.  The U.S. is also the largest source of imports, providing over half of the total.

Boeing Australia has the leading local market share at 38.6% followed by BAE Systems with 21.8%, Airbus Australia 14.5%, Lockheed Martin and Raytheon each with 5%, and Honeywell with 3%. One notable development is that Boeing is proceeding with its intention to produce an Australian-developed UAV platform called the Loyal Wingman, the first aircraft developed by Boeing outside of the U.S.

Australia is a major buyer of U.S. aircraft and aircraft parts and while the quantity and value of specific items can vary dramatically from year to year, annual purchases by Australia since 2015 have averaged in excess of US$2 billion. For instance, in 2016, Australia was the largest importer of U.S. helicopters worldwide. The Australian aerospace market is characterized by very strong defense purchases which saw Australia flying almost exclusively U.S.-made aircraft in the world’s first fifth-generation air force in 2020.

Forward projections of Australian commercial aerospace purchases have been complicated by severely reduced international economic activity in 2020 and the Australian Government decision to apply stringent border controls including mandatory quarantine periods, leading to the cessation of all international passenger services by Australian airlines and the majority of passenger services offered by other foreign airlines. These decisions have severely impacted international and domestic air travel in and out of Australia.  However, a limited number of passenger services continue while some aircraft have been converted to carry air cargo instead.

This led to the grounding of most passenger aircraft in Australia in mid-2020 but Australian travelers historically spend in the order of US$45–50 billion on international travel and this foregone spending has been redirected to other domestic options including domestic aviation-based tourism. This has driven additional services, new routes and demand for smaller aircraft.

Commercial aviation purchasing is led by major players Qantas and Virgin Australia with over 200 Boeing passenger aircraft currently in service.

The United States is the leading source for all categories of imported aircraft and parts into Australia, supplying nearly all of Australia’s military requirements and 60% of Australia’s civilian needs, thereby linking Australia closely to U.S. standards, suppliers, parts, and finished aircraft. U.S.-manufactured aircraft represent a sizeable proportion of the registered aircraft in Australia, ensuring a market for spares, accessories, and service. Other registered aircraft are manufactured in Australia, Germany, the U.K., and France. Australia’s Civil Aviation Safety Authority’s (CASA) acceptance of FAA certification standards strengthens the relationship between Australian and U.S. aircraft and parts exporters.

The Australian aerospace and aviation industry is a mix of small and medium enterprise (SME) subsidiaries that supply parts, engineering services, and expertise. Local firms specialize in repair, maintenance, airframe component manufacturing, airport systems, infrastructure, avionics, aero engine, and engine component manufacturing. A select group of specialists carries out commercial aircraft maintenance.

There are 15,853 aircraft on Australia’s civil aviation register which includes approximately 11,600 powered aircraft; 2,335 helicopters; 1,000 gliders; and 450 lighter than air aircraft.  Leading brands are Cessna (3,553), Piper (1,802), amateur built (1661), Robinson Helicopter (1271), Beech (619), Bell Helicopter (254), Kavanagh Balloons (295), Boeing (248), De Havilland (233), and Schempp-Hirth Flugzeugbau GmbH (179). Other notable brands include Cirrus (202), Air Tractor (172), Mooney (152), Airbus Industries, (120), Textron Aviation (105), American Champion (103), Bombardier (87), Pilatus (82), Aerospatiale Industries (81), and Raytheon (72). There are over 700 design, maintenance, maintenance training, parts manufacturing and parts distribution organizations. Australia is a key market in, and a major distribution point for, the Asia Pacific.

 

2018

2019

2020

2021 (Estimated)

Total Local Production

3,750

3,440

1,920

>2,000

Total Exports

1,650

1,846

1,295

>1,500

Total Imports

2,957

2,609

2,280

>2,500

Imports from the U.S.

2,175

1,866

1,775

>2,000

Total Market Size

5,057

4,203

2,905

>3,000

Exchange Rates

.77

.70

.69

.77

(total market size = (total local production + imports) - exports)

Unit: US$ Thousands

NB 2021 estimates are rounded to reflect industry expectations of modest recovery with imports the key beneficiary.

Data Sources: Global Trade Atlas, IBISWorld Australia, Australian aviation industry estimates and analysis as well as tariff and trade data from the U.S. Department of Commerce and the U.S. International Trade Commission. Data retrieved as of 9 July 2021.

Leading Sub-Sectors

  • Defense contracts – all categories
  • QANTAS fleet upgrade
  • Parts, repairs and maintenance
  • Business jets
  • Helicopters
  • Aerial agriculture and firefighting
  • Aviation Training and Simulation
  • Unmanned Aerial Vehicles (UAVs)

Australia has a large civil helicopter fleet (2,335), ranking second worldwide. Helicopters are well suited to supporting remote oil, gas and mining projects as well as island tourist resorts, aeromedical and rescue services, fire-fighting and large agricultural properties. Australia was the largest buyer of U.S. helicopters in 2016 and is of ongoing interest due to both its large commercial fleet as well as major defense projects requiring helicopter acquisition and maintenance. Indeed, Boeing was announced in January 2021 as Australia’s preferred supplier of armed reconnaissance helicopters in a defense project valued at over US$3 billion.

Opportunities

The severe 2019/20 Australian summer demonstrated high demand for aerial firefighting services, both fixed and rotary wing.

Commercial passenger-based aviation services are expected to be substantially reduced in the short term in response to reduced economic activity worldwide in 2020 and 2021.  This will impact airlines, airports, aircraft component manufacturers, MRO services and aviation support industries including catering and cleaning in Australia.  The defense sector and to some extent air cargo services are positioned to avoid the worst of this downturn and increasingly domestic passenger aviation services have responded strongly in 2021 although repeated internal border closures to halt the spread of virus has disrupted this positive trend. A progressive convergence of Australia’s vaccination coverage with international performance and trends in international air travel are anticipated to drive substantial growth in Australian aviation services in 2022.

Australian carrier Qantas has previously committed to about US$12.6 billion (AU$17 billion) for more fuel efficient, next generation aircraft such as the Airbus 380 and the Boeing 787 Dreamliner over the coming 5-10 years. This strategy can be expected to change as the international market moves away from the Airbus 380 and the domestic market and neighbouring countries drive expansion via shorter haul and smaller aircraft.  This presents a two-track strategy where Qantas’ ultra long haul routes expand to offer direct services to the Americas and Europe and domestic aviation experiences unprecedented growth in new routes and destinations.

Virgin Australia, Australia’s second major airline, also announced in April 2021 that its recovery efforts include the reintroduction of 10 Boeing 737-800 aircraft and the planned return of more than 80% of the airline’s pre-pandemic domestic capacity by mid June 2021.  State border closures during May and June are believed to have set back that timeline. Virgin also plans to bring back 220 cabin crew from discontinued long haul international, ATR regional, and TigerAir Australia operations.

The commercial airline market sources major equipment directly from manufacturers and prefers to obtain Original Equipment Manufacturer (OEM) spares from approved suppliers.

In Australia, Qantas leads the field in commercial aviation, followed by Virgin Australia. Opportunities in the aviation market include a range of products from avionics to ground support equipment. Best prospects remain in parts and components supplies for aircraft maintenance, repair, and overhaul of U.S.-manufactured airplanes.

Australia announced in March 2016 a 10-year, AU$195 (US$150) billion defense equipment investment program which it subsequently updated and expanded in 2020 into a AU$270 (US$200) billion acquisition program thru 2029-30. This includes a heavy focus on various fixed-wing, helicopter and UAV aircraft. Australia is a major importer of defense systems worldwide and a leading customer of the U.S.  peaking as its 2nd largest market in 2017. This features a strong focus on aviation-related capabilities.

Australia is also the second largest business jet market in the Asia Pacific, purchasing approximately 184 aircraft in 2019, and growing rapidly.  While there have been some recent acquisitions it is unclear whether the overall trend is one of growth.

Australia is a major helicopter market; operates over 2,300 helicopters; offers substantial opportunities in both the civilian and defense sectors; and has a fast-growing trade show called Rotortech dedicated to the helicopter industry.  Rotortech was held most recently in June 2021 in Brisbane and was strongly supported by the aviation industry.

Australia also has a small but growing space industry including one of the most active space start-up sectors worldwide. General focus is on the smaller operations – CubeSats and launch facilities for smaller rockets/payloads with two centers under development in South Australia and the Northern Territory. There is a long history of collaboration with NASA and U.S. industry in support of both manned and unmanned space missions; extensive take-up of space-based services for communications, agricultural, geospatial and navigational purposes; and the forward defense investment plan has made provision for approximately AU$7 billion (US$5.5 billion) for space-related capabilities. In June 2021 the Australian Government announced its intention to start discussions with the United States with a view to establishing a bilateral Technology Safeguards Agreement (TSA) to facilitate enhanced U.S. Australia collaboration, especially in launch capabilities in Australia.

Resources

MRO Australasia 2020

March 2022, Brisbane, Queensland

The newest event on the Australian aviation calendar, MRO Australasia was announced by Aviation Week Network in Singapore during Commercial Aviation Services Asia-Pacific and the inaugural event was held in Brisbane March 11-12, 2020. The event featured a two-day conference plus showcase exhibition allowing suppliers to meet key decision-makers and for buyers to learn about, test and purchase new MRO solutions and services. MRO Australasia covers maintenance, repair and overhaul for all fixed wing aircraft, business, general and regional aviation and rotorcraft. To be held every second year.

Rotortech 2021

June 15–17, 2021, Brisbane, Queensland

Largest helicopter event in Southern Hemisphere and now managed by Aerospace Australia Limited, part of a not-for-profit group headed by Aerospace Maritime and Defence Foundation of Australia Limited, organisers of the Avalon Airshow and various other major defense trade shows (Land Forces, Pacific and CivSec). As the specialist rotor event for the largest rotor industry in the Asia Pacific, AMDSFA has high hopes to grow this event significantly – and fast. Unmanned aerial vehicles are also featured at this event. Held every second year, usually in June. 

Resources to key Australian aerospace associations and businesses follow:

  • Aircraft Owners and Pilots Association of Australia
  • Airservices Australia
  • Australian Airports Association
  • Australian Helicopter Industry Association
  • Aviation/Aerospace Australia
  • Aviation Maintenance Repair and Overhaul
  • Civil Aviation Safety Authority
  • QANTAS
  • Recreational Aviation Australia
  • Regional Aviation Association of Australia
  • Space Industry Association of Australia