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Top Markets for U.S. Aerospace and Defense Suppliers in Rank Orderfor calendar year 2017 in USD billions

Export of Aircraft Parts Fast Growing

Biggest export opportunity for aerospace contracts is supplying Aircraft parts.

China Commercial Aerospace Market

Market Landscape-$18.875 billion commercial aircraft imported in 2018.

By 2022 China is expected to overtake U.S. as the world’s largest market.

Estimated 7,000 aircraft to be purchased within 20 years

Market for parts growing 10% per year

Best Prospects

Opportunities for business aircraft and civilian helicopters growing quickly

China’s emerging aerospace industry gives rise to supply parts to China COMAC’s- ARJ21 regional jet and C919 narrow body civil aircraft and the Aviation Industry of China’s(AVICS) MA 700 and other aircraft in design phase.

Germany Aerospace Market Market Landscape

Hamburg a global distribution hub for Airbus parts

Increased demand for A320 and associated assembly

Market Opportunities

EU WTO Duty Free specific parts- 250 and other

Bilateral Safety Agreement (BASA) A 2009 agreement allowed some parts approved by FAA may be exporter to Germany with no EASA approval

Parts Manufacturer Approval- The U.S. is unique in allowing the production of aircraft parts under FAA Authority known as Parts Manufacturer Approval or PMA. A big advantage since there is no equivalent in Europe so advantage over OEM shops who cannot supply to aircraft companies or MRO shops.

United Arab Emirates Commercial Aerospace Market

Market Landscape

15% of UAE economy driven by aerospace

Fast becoming a major world hub with 4 leading players based in UAE- Dubai based Emirates, low cost carrier, flydubai, Abu Dhabi based Ethad Airways, and Sharjahbased Air-Arabia

UAE government in process of pouring 40 billion dollars in airport expansions

Emirates Airlines operates the most Airbus 380’s and a large Boeing 777 fleet.

Best Prospects

MRO needs growing quickly and poised to reach $8.8 billion by 2023, nearly 10% growth per year

Ground Services- Ground Handling, Catering, Fixed Based Operations

Aircraft Recycling and Decommissioning

Singapore Commercial Aerospace- Asia Parts Hub

Market Landscape

Singapore parts market centers on the maintenance industry.

Singapore is the top market for aerospace parts exports- averaging over $5.7 billion between 2005- 2014; 80% of aerospace imports and U.S. suppliers having a 65% share

Best Prospects

Singapore is an ideal hub to serve the fast growing aerospace markets in S.E. Asia- driven by numerous regional carriers( Air Asia, , Lion Jet, Thai Smile, etc.)

Singapore operates some of the largest MRO operations in the world including: ST Aerospace and SIA

The UK Airline IndustryCurrent market trends:

Mergers and acquisitions

Focus on reducing cost base and improving profitability

Number of passengers grew by 44 million from 2007-2017

Airlines are positioned to make overall investments of $75 billion to replace 504 existing aircraft and acquire 409 new aircraft

Exporting to the UKFor U.S. companies selling to UK-

Challenging for both SMEs and OEMs

U.S. suppliers should consider collaborating with larger firms with a presence in UK

Consider using a local distributor or agent

Entering the UK aerospace market requires patience, investment, innovative products and competitive pricing

Best Prospects/Current Demand:

Aerodynamics

*Wing design

Propulsion

*Rotor blades

*Engine assembly

Aero structures

*Fuselage

*Wing assembly

Advanced systems

*Avionics

*Undercarriage

Selecting Best Export Markets- Defense Industry

Different models of Defense Exports

Foreign Military Sales(FMS) is the program by which the U.S. government assists allied nations and international organizations in acquiring military technology. Under FMS, the U.S. government assumes responsibility for the procurement of and transfer of requested defense articles, services and training.

The Direct Commercial Sales(DCS), U.S. companies negotiates directly with foreign entities, whether they are national governments, local law enforcement, or private firms. The U.S. government is only involved in the approval and issuance of export licenses and is not party to the contracts

DCS VS FMS From the perspective of companies, because the DoD

controls all aspects of FMS procurement, FMS are made on the same basis as sales to the federal government. Familiarity with the DoD’s procurement procedures make FMS attractive to U.S. defense contractors. DCS contracts with foreign defense entities may be subject to foreign government procurement , national security, and anticorruption laws that are difficult to navigate and may put U.S. companies at a disadvantage, such as requirements to partner with local companies or use local content. One big difference is the sales process-U.S. policy stipulates that most Letter of Requests be responded to with a Letters of Offers and Acceptance

www.export.gov.industry/aerospace

Key AerospaceTrade Events Singapore Air Show, 2.11-

2.16

• CA Step Supported Event

• Paris Airshow/Farnborough

• MRO Middle East Expo

• Dubai, 2/25-2/26

Export Resources www.export.gov/industry/a

erospace

U.S. Defense Export Handbook- ITA 2016( online handouts); 2020 edition pending

www.aia-aerospace.org

Current export data and statistics

Country Commercial Guides

www.export.gov/ccg/

Brief Industry Snapshots

Best Prospects

Trade Shows

Embassy Contacts

California STEP Program

www.californiaexport.org