1. www.renewables-made-in-germany.com
Actual challenges for international suppliers
in the (civil) aviation industry
Carola Muschke
(Manager EU Projects)
Hamburg Aviation
(Cluster association)

2. Actual challenges for international suppliers in the aviation industry
Framework: The world we are living in: Growth
Despite economic crises the
aviation sector is expected to
grow about 5% worldwide
during the next years! (IATA)

3. Actual challenges for international suppliers in the aviation industry
Consequence: worldwide emission reduction
 ACARE: Vision 2020
 A reduction in perceived noise to one half of current average levels.
 A 50% cut in CO2 emissions pppkm (50% cut in fuel consumption: new aircraft of 2020)
 80% cut in nitrogen oxide emissions (Nox)
 European Commission: Flightpath 2050
 75% reduction in CO2 emissions & a 90% reduction in NOx emissions.
 The perceived noise emission of flying aircraft is reduced by 65% (relative to a typical new aircraft in 2000 )
 IATA: Carbon-neutral growth
 Improvement in fuel efficiency of 1.5% per year from 2009 to 2020
 A cap on net aviation CO2 emissions from 2020 (carbon-neutral growth)
 A reduction in net aviation CO2 emissions of 50% by 2050, relative to 2005 levels
 ICAO: Assembly Resolution A37-19
 Global aspirational goals for the international aviation sector of improving 2% annual fuel efficiency and
stabilizing its global CO2 emissions at 2020 levels, and further work to explore the feasibility of a long-term
global aspirational goal

4. Actual challenges for international suppliers in the aviation industry
Airbus’ eco-friendly endeavors
Airbus R&D investments are over €2
Billion of which more than 90 % have
environmental benefits.
Airbus is committed to the Flightpath
2050:
 75 % CO2 emissions reduction/pppkm
 90 % NOx emissions reduction
 65 % Noise reduction
These targets were set by the ACARE
against the 2000 baseline.
“Looking ahead to the next five years,
we remain committed to zero-
carbon growth by continuing our
environmental conservation efforts
while ramping up production.
Our goal is to achieve zero absolute
growth in carbon emissions, water
intake and solid waste sent to
landfills, and zero revenue-adjusted
growth in hazardous waste
generation, by 2017.”
Boeing´s environmental policy:
Goals are shifted to suppliers

5. Actual challenges for international suppliers in the aviation industry
Consequences:
 New energy efficient production, materials, technologies, green tracing &
tracking gain importance
 New business opportunities appear
 Green innovations will be difficult to protect, as main suppliers work for all
OEMs
 Free innovation development vs. price orientated supply for market needs
 Global sourcing also of limitted of raw materials
 Long process from innovation to market entry
 return of investment in 30 years,
pre-financing and long term perspectives
(Image: Airbus)
Projects like CARE

6. Actual challenges for international suppliers in the aviation industry
1.Challenges: Suppliers need to…
…be smart & flexible enough in order to adapt to new & quickly changing
developments/oportunities worldwide
 be innovative & invest in R&D in greener aviation (light weight
materials, fuel cell)
…network & take a look into the future, develop products for future needs
…deal with less raw materials, high fuel prices, ecological awareness of
population, emission trading
…participate in national/regional R&D projects to acquire necessary funds
 LuFo, H2020, bilateral projects with Mexico, etc.
Support of SME via clusters
…cooperate with international players as labs, universities, OEMs or
research centres and other suppliers for a common & integrated approach

7. Actual challenges for international suppliers in the aviation industry
Framework 2: Globalization & Appearance of new OEM
Situation today: OEM Duopoly:
 Boeing
 Airbus
 Aprox. 50-50% market share
Situation tomorrow: Competition:
• Embraer
• Bombardier
• Comac
• UAC Russia
• Japan, …
„sporty game“ new competition and high pressure

8. Actual challenges for international suppliers in the aviation industry
OEM´s supplier consolidation
OEMs are influencing their large suppliers indirectly to
buy smaller ones because of fears that weaknesses in the
supply chain could undermine the aircraft makers’
ambitious plans to increase production.
Boeing and Airbus each have about 1,500 suppliers
ranging from so-called tier 1 companies providing aero
structures or equipment for jets to smaller tier 2 and
three groups making components.
OEM – 1.Tier – 2.Tier – 3.Tier – n.Tier

9. Actual challenges for international suppliers in the aviation industry

10. Actual challenges for international suppliers in the aviation industry
Consequences:
 The current consolidation process is strongly connected to an increasing
internationalization.
 Pressure on the prices within the value chain, tough contracts, less profit, high
administrative effort
 Greater dependence on Tier 1 and increased risk sharing/pre-financing by suppliers.
 New OEM, depend on established suppliers and their know-how, less competition
 Innovations process is slowing down, investment only for market demand, less
competition in R&D activities
 Globalised supply chain, no national contract placing, also politically driven contracts
in markets of strategic interest
 SME do not want/can not go international, more and more mergers
 More bigger companies threaten the existence of middle class businesses
 Production in third countries, spreading of know-how
 International market entries are a big challenge, lessons must be learned
 New opportunities in growing markets

11. Actual challenges for international suppliers in the aviation industry
2. challenges: Suppliers need to…
…make sure no information is lost in the supply chain
(3Tier not knowing what OEM want/are planning)
 …identify and contact the relevant Tier level above /right client worldwide/SME: cooperate!
…find their own role in a global market (consolidate, adapt to market needs)
… take advantage of the new possibilities the new OEMs offer! New clients, less dependence
…have a stable financial situation/access to credits/equity
…find new business cases
Find the right international
partner
Successful suppliers are
internationally acting companies

12. www.renewables-made-in-germany.com
Thank you for your attention!
Carola.muschke@hamburg-aviation.com