Story ID: 547
AlixPartners Forecasts Trebling of Aerospace Revenue
By: Guillaume Lecompte-Boinet
Caption: Consultant believes services and digitisation will drive the industry to grow rapidly over the next ten years.
Word Count: 252
According to a just-released annual aerospace and defense study from the French bureau of U.S-based consultancy AlixPartners, support-services and digital will be the key drivers for the four major aircraft OEMs: Boeing, Airbus, Bombardier, and Embraer. "OEMs are looking to increase services revenue by more than three times in the next 10 years," said Alain Guillot, managing director of AlixPartners in France and responsible for the aerospace practice.

The report suggests that global aerospace turnover will increase from $20 billion in 2017 to $66 billion in 2027, with the main share provided by Boeing ($50 billion) and Airbus ($10 billion). Services and MRO could be a growth driver for the aircraft manufacturer even if the new aircraft market remains strong in the coming years. AlixPartners sees the recent acquisition of KLX by Boeing as "a clear sign of the big services ambition of this OEMs," added Guillot.

Digitalisation will also play a key role in the future. According to AlixPartners researchers, full digital transformation could bring a 20 percent cost reduction to adopters within 24 to 36 months. The impact will spread over several areas, including product development (with design-to-cost 4.0), industrial operations (automation), and support and services (with predictive MRO). "Airbus is playing a leading role in that movement with its new Skywise digital platform," said Guillot.

The panel of commercial aerospace companies studied by AlixPartners shows a global revenue of $341 billion in 2017, a 69 percent increase from $202 billion in 2007. The average EBIT margin of the sector is 11.9 percent versus 9.9 percent a decade ago.