France - Country Commercial Guide
Civil Aircraft and Parts (AIR)

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

Last published date: 2021-03-04

Overview

 

2017

(Estimated)

2018

(Estimated)

2019

(Estimated)

2020

(Estimated)

Total Market Size

31,86

29,70

30,20

n/a

Total Local Production

54,92

59,51

60,20

-50%

Total Exports

46,68

50,69

50,57

n/a

Total Imports

23,62

20,78

20,57

n/a

Imports from the US

5,23

3,58

3,85

n/a

Exchange Rate 1 Euro

USD 1.13

USD1.18

USD 1.11

USD 1.12

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

Figures in USD billions. Sources:  GIFAS, USDoC, French Customs.  Note: French Customs figures are quoted in CIF (HS 8802 + 8803), USDoc figures are quoted in FAS.  * indicates unofficial estimates based on various industry sources. Year to year figures subject to currency fluctuations.

Reported revenue for the French civil aerospace industry in 2018 grew to €54.24 billion (GIFAS – USD 60.2 billion), out of total non-consolidated aerospace and defense aerospace revenues of €74.3 billion.  This is a 13% increase over 2018. The aerospace and defense aerospace industry exported approximately 84% of its consolidated turnover, and the civil sector represents 73% of revenues. Orders overall in 2019 were slightly up, to €61.9 billion,

However, since the Spring of 2020 there has been a very sharp downturn, which is reshaping the market.  Airbus has announced it will decrease production by 40% for at least the next 2 years and has laid off 15,000 employees.  This is deeply impacting all parts of the aerospace supply chain and has forced the cancellation of hundreds if not thousands of external service contracts by Airbus. MRO services and components and aerostructures are particularly affected.  Air traffic is down by over 60%, and demand for aircraft with it.  Despite the downturn, Airbus currently has a production backlog of 8 and a half years, but new orders are flat.  The French government is doing what it can to shore up the industry and all the companies in it; about 7 billion euro has been allocated to assist the major flag carrier, Air France, and another 8 billion to the aerospace supply chain.  There are monies for R&D, as well as private sector and public investment funds and special government unemployment aid.  The goal is to keep R&D flowing and to save jobs, so the industry will be positioned to quickly ramp back up when recovery happens. 

Five aircraft manufacturers account for the majority of the French market: Airbus (large commercial aircraft), Airbus Helicopters, Dassault Aviation (high-end business jets), ATR (passenger and cargo turboprop aircraft for regional transport, an Airbus JV with Italian firm Leonardo), and Daher (TBM and Kodiak light aircraft and business turboprops).

Because of the breadth and depth of the aerospace industry in France, U.S. manufacturers often decide to use the services of a distributor or agent to reach out to the many potential customers. It is generally considered difficult to break into the business (with some exceptions based on product type) without local representation that can interface with the various layers of engineers, purchasers and supply chain quality managers. It is a normal business practice in France for aerospace manufacturers’ representatives to work on retainer only or a mixed retainer/commission fee; rarely will an agent accept a commission-only contract to develop new business.  U.S. firms must be prepared to invest significantly in their business development process over extended periods before generating any orders. AS9100/ISO 9001 certification would be considered the minimum requirement for doing business in the aerospace supply chain in France.

Leading Sub-Sectors

A major technology shift is taking place in aerospace in France – the current market difficulties and the resulting French Government aerospace assistance plan has accelerated it - and that is to move to producing a zero emissions aircraft by 2035, a very ambitious goal.  It is usually new aircraft development, driving new design and technology requirements, which create opportunities for potential suppliers.

The best prospects for American firms in this market continues to be those associated with the manufacturing of new aircraft or engine models, or very technical products.

53% of the Airbus A350 weight is in composites, while the firm is continually looking to increase this percentage, as more potential exists for integrating composite materials into aircrafts. Combined with the important level of American supplier penetration on French platforms, increasing demand for lighter, fuel efficient aircraft, and Airbus’ stated goal to increase spending across the Atlantic, experts expect the subsector of aerospace composites to continually grow. 

Opportunities

In general, the French aerospace market provides many opportunities (less so in the next 2-3 years but will again) and is considered extremely competitive.  Potential new suppliers must target the right tier and understand clearly what their value added is compared to those already in place in the supply chain and must understand they will be competing with companies from around the world, not just in France.  Many major French firms like Safran, Airbus or Dassault are all present in the US and have sourcing offices there, which may be an easier path to receiving OEM approval.

Future aircraft will increasingly include more electric systems on board and will likely move to hydrogen as a primary fuel, although there are other technologies such as hybrid electric or biofuel options on the table in the interim.  The decision on the technology to pursue to achieve a narrow body carbon neutral aircraft should be made in 2025, for a launch in 2027-2028 and entry into service by 2035.  Airbus is looking to field a successor to the A320 or perhaps a regional aircraft, and hydrogen fueled rotorcraft and business jets are also being considered.  Other technologies of interest include Enhanced Vision Systems, other autonomous systems and specialty materials.

Airbus is also currently reviewing the approved Boeing list of suppliers in order to identify new potential suppliers. They are looking for redundancy, expecting industry consolidation to take place in the supply chain over the next 2-4 years.

It is important to keep in mind that beyond French-made aircraft, French equipment suppliers are also working globally, on Embraer, Pilatus, Comac, Mitsubishi aircraft, etc., as well as all the major U.S. aircraft manufacturers. However, entering the French market requires patience, investment, innovative products and competitive pricing.

Web Resources

Aeromart Toulouse – December 2-3, 2020

Supply Chain Business to Business Meetings

http://www.bciaerospace.com/toulouse/

 

Paris Air Show – June 21-27, 2021

http://www.paris-air-show.com/en

French Aerospace Industries Association

https://www.gifas.asso.fr/en/