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: 2022-07-19

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. The industry body is the Australian MRO Business Association (AMROBA). As the Australian aviation and tourism sectors recovered from the massive disruption of the past two years the early focus has been on the domestic market.  This has led to additional services, new routes, and demand for smaller aircraft. Cargo services have continued to do well, supported in part by the Australian Government as it sought to help air freight-dependent export industries stay in business. 

Some industry projections point to confidence in domestic aviation travel returning to full capacity by the end of 2022/23 and a shift in industry focus towards ordering smaller aircraft.  Domestic and international airline revenue is forecast to return to pre-covid levels by 2025 while non-scheduled air transport revenue appears to have held up well over the past two years.

However, experience during 2022 points to various hurdles that need to be overcome before air travel can be regarded as having achieved a full recovery.  While there has been a strong rebound in passenger throughput through Australian airports key challenges remain. There are widespread labor shortages and passenger demand exceeds the capacity of airports to smoothly cope with their return. Many Australians have been unable to travel for nearly two years and have allowed their passports to lapse and/or are seeking their first and this has led to delays in their issuance. A spike in travel demand has also placed stresses on visa-issuing offices for international travel, including those of the U.S., and the persistence of various strains of the covid virus and associated travel restrictions related to testing has conversely depressed travel demand to some destinations. All of this impacts on airline and airport decision-making for equipment, personnel, and service delivery.

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.

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 historically 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. The U.S. is also the largest source of imports, providing over half of the total.

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.

In terms of commercial aviation, Australian airlines have been long time customers of Boeing, but in December 2021 QANTAS announced it had chosen Airbus as the preferred supplier to replace its domestic fleet. Deliveries will start in mid-2023 and continue over the next ten years as QANTAS replaces an ageing fleet of 75 Boeing 737s and 20 717s. QANTAS committed to buying 20 Airbus A321XLR aircraft and 20 A220-300 jets. It also took purchase options on another 94 aircraft. This is quite a change in direction for QANTAS which has operated Boeing jets since 1959 and was once the world’s only airline with an all 747 fleet.  QANTAS did indicate that it would continue to have a substantial relationship with Boeing, notably with regard to 787 aircraft, and anticipated further business with Boeing in the longer term.

This announcement followed an earlier decision by Jetstar to acquire more than 100 Airbus A320neo aircraft, which influenced QANTAS to combine its narrow body order with that by its low-cost, wholly-owned subsidiary. Collectively it will allow the QANTAS Group to draw down on a total of 299 deliveries from the Airbus A220 and A320 models as needed over the coming decade and beyond for QANTAS, QantasLink, and Jetstar. Once finalized this will represent the largest aircraft order in Australian aviation history.

Prior to the disruption to the aviation sector in 2020 and 2021 the two leading Australian airlines, QANTAS and Virgin Australia, had over 200 Boeing passenger aircraft in service. The United States has been 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.

Australia also has a large civil helicopter fleet (2,200+), 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 worldwide in 2016 and is of ongoing interest due to both its large commercial fleet as well as major defense projects focused on helicopter acquisition and maintenance. Indeed, U.S. helicopter manufacturers are the preferred providers for the defense sector given recent, prolonged issues with European-sourced options. This poses the real prospect of U.S. companies winning billions of dollars’ worth of defense business, with Boeing already announced as being chosen to supply its Apache attack helicopters.

There are over 16,000 aircraft on Australia’s civil aviation register which includes approximately 11,600 powered aircraft; 2,300 helicopters; 1,000 gliders; and 450 lighter-than-air aircraft.  Leading brands are Cessna, Piper, amateur built, Robinson Helicopter, Beech, Bell Helicopter, Kavanagh Balloons, Boeing, De Havilland, Cirrus, Air Tractor, Airbus, Textron, American Champion, Bombardier, and Pilatus. 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.

Aerospace Market Size, million USD

  2018 2019 2020 2021 2022 {estimated}
Total Local Production 3,750 3,440 1,920 2,450 2,650
Total Exports 1,650 1,846 1,295 1,300 1,400
Total Imports 2,957 2,609 2,280 2,500 2,800
Imports from the U.S. 2,175 1,866 1,775 1,500 1,700
Total Market Size 5,057 4,203 2,905 3,650 4,050
Exchange Rates .77 .70 .69 .77 .72

 

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

 

Unit: US$ Millions

NB 2022 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 5 June 2022.

Leading Sub-Sectors

Defense contracts – all categories – see separate Defense section. Australia has committed to a ten-year US$190 billion investment in new acquisitions, including a substantial aviation component.

Parts, repairs, and maintenance – airlines have shown a willingness to have work done overseas and there are also opportunities to work with Australian distributors and service providers.

Business jets – Australia operates one of the largest business jet fleets in the Indo Pacific.

Helicopters – Australia is one of the world’s largest helicopter operators

Aerial agriculture and firefighting – important market segments given Australia’s large agricultural sector and vulnerability to wildfires.

Aviation Training and Simulation – a growing sector

Unmanned Aerial Vehicles (UAVs) – a dynamic, fast-growing sector impacting numerous industries

Opportunities

The severe 2019/20 Australian summer demonstrated high demand for aerial firefighting services, both fixed and rotary wing.  This has led to increased resourcing of preventative measures as well as aerial firefighting resources.

Commercial airlines including QANTAS and Virgin Australia continue to be the big purchasers and despite QANTAS’ recent decision to focus on acquiring Airbus aircraft, it remains a leading long-term partner for Boeing. QANTAS also has particular objectives in the area on non-stop long distance passenger travel, aiming to connect Sydney with London and New York by this means within the decade. There is also great interest in new fuel options that reduce carbon emissions and the technology to achieve that. A newfound focus on the Australian domestic market also presents a need for more shorthaul, 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. 

The commercial airline market sources major equipment directly from manufacturers and prefers to obtain Original Equipment Manafacturer (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$190) billion acquisition program through 2029-30. This includes a heavy focus on various fixed-wing, helicopter and UAV aircraft.  Refer to the separate Defense section for details.

Australia is also the second largest business jet market in the Asia Pacific, purchasing approximately 184 aircraft in 2019, and growing rapidly.  While that trend was interrupted by the travel restrictions of the past two years it also had the reverse impact of demonstrating a ‘safer’ and faster international option for corporate and wealthy travelers. Future sales prospects are quite encouraging.

Australia is also a major helicopter market; operates over 2,200 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 2022 in Brisbane and was strongly supported by the aviation industry, including numerous U.S. exhibitors.

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 facilties 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 2023, MRO Australasia (aviationweek.com)

May 17-18, 2023, 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. Planned to be held every second year, the next event has been delayed to 2023 due to disruption to the aviation sector over the past two years.

Rotortech 2022, ROTORTECH 2022: Helicopter and Unmanned Flight Exposition: 21 - 23 June 2022, Royal International Convention Centre, Brisbane, Queensland, Australia

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 and Indo Pacific Maritime). As the specialist rotor event for the largest rotor industry in the Asia Pacific, organisers have high hopes to grow this event significantly. Unmanned aerial vehicles are also featured at this event. Held every second year, usually in June, although there were events held in 2021 and 2022.

AFAC 2022, AFAC22 powered by INTERSCHUTZ | Conferences (afacconference.com.au)

August 23-26, 2023, Adelaide, South Australia

Annual conference and trade exposition for the emergency management agencies across Australia and New Zealand, including a strong focus on aerial firefighting services. This annual event moves between various cities and has historically been well-supported by North American companies.

Resources to key Australian aerospace associations and businesses follow:

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