In a letter to the government, they have called for
measures including nancial support for companies
affected, swift delivery of a more resilient testing system
to support a resumption in international travel, and relief
from levies, duties and charges.
Despite the uncertainty and challenges that the aerospace
industry is facing, 2021 is still forecasted to be a much
improved year on 2020 and will slowly return to prepandemic
levels over the next few years.
A 2021 aerospace and defence industry outlook report
by consultancy Deloitte, sees commercial aerospace
rebounding in 2021, but not to pre-pandemic levels and
says it will remain challenging, forecasting travel demand
will return slowly and not to previous highs until 2024.
The report says the defence sector will remain stable
and continue to weather the pandemic’s disruption, while
the spacecraft sector will be strong, fuelled by the
different space programmes taking place
The report predicts that in 2021,
commercial aerospace manufacturers
are likely to focus on restructuring and
cost reduction to position themselves
for pro table growth in the long term.
“The industry is also likely to take
aircraft are forecasted to be
delivered in 2021
advantage of the pandemic and its
subsequent drop in demand to transform
supply chains. A&D companies could also
pursue M&A opportunities to build scale and
capture greater value. Long-term growth prospects for
the A&D industry remain strong.
“The space sector, together with technological
developments such as advanced air mobility, hypersonics,
electric propulsion and hydrogen-powered aircraft, are likely
to drive future growth for the industry,” the report adds.
In 2021, the report estimates that global commercial
aircraft deliveries will be 900 aircraft, a decline of 44 per
cent from 2018, the peak year for deliveries with new
orders “likely to remain subdued” and airlines continue
with order cancellations, aircraft backlog could decline
Commercial airline deliveries are being driven by still
depressed air travel and passenger travel is expected to
rebound, with 75 per cent year-over-year growth in 2021,
but that will still be about 40 per cent below pre-pandemic
levels, the report explains, using gures from IATA.
UK AEROSPACE ATTRACTIVENESS
There is still optimism for aerospace manufacturing in the
UK, as highlighted in the PwC 2020 Aerospace
Manufacturing Attractiveness report that assesses the
attractiveness of aerospace manufacturing investments,
which ranked the UK 7th out of 100 countries and as the
top performing European nation.
The report assesses a range of aspects such as cost,
economy, infrastructure, labour, industry, and tax policy.
Crucially, it also analyses geopolitical risks such as Brexit.
AEROSPACE INDUSTRY REVIEW
Karsten / stock.adobe.com
The UK and EU signed a last-ditch trade deal that was
welcomed by the aerospace industry, but uncertainty
remains and how that evolves remains to be seen – but
alongside Covid-19 - that has been a factor in the UK’s
drop from 4th position in 2019.
The top three spots in 2020 were held by the US,
Singapore (3rd - 2019) and Canada (2nd - 2019) with
South Korea, Japan and Australia leapfrogging the UK to
take 4th to 6th positions respectively. Germany, the
Netherlands and Hong Kong complete the top 10 nations.
The pandemic exacerbated a rash of challenges earlier
this year, including cash ow and liquidity, resulting in
proactive government support, supply chain disruptions
and, naturally, unprecedented revenue shortfalls.
The report notes that while the return of air travel
demand could take as long as three to ve years, defence
infrastructure investment, as the Deloitte report says, has
been more resilient during this period.
Roland Sonnenberg, head of UK aerospace and
defence at PwC, is adamant that despite the
uncertainties ushered in by these challenges,
the UK remains an attractive hub for
“The industry must double down to
compete, continuing the investment in
skills and technology, particularly with the
aim of reducing our carbon footprint, if it is
to continue to unlock the UK’s capabilities
and bolster its attractiveness as a trade and
investment partner for the EU and other
nations,” he says.
Sonnenberg says organisations “must also take
appropriate steps to ensure they are ready to move
people, goods and data differently in 2021”.
He adds: “Until the pandemic hit, the industry’s
principal focus over the last 20 years was growth - but now
is the time for priorities to change.
“Businesses have an ideal opportunity to take stock,
adjust their strategic priorities, and focus on their
immediate cash ow and working capital challenges so
they are in robust health and able to react
swiftly when markets improve.
“Firms that build on their immediate
response to the pandemic and
shifting Brexit challenges,
innovation and agility, will be best
positioned to outpace their
competitors in the months and
There is some hope and the
beginning of Covid-19
vaccination programmes in
the UK, Europe, and around
the world provides the
realistic prospect of a longterm
sustainable recovery in
the aviation and aerospace
industries to begin this year.
www.machinery.co.uk | MachineryMagazine | @MachineryTweets | February 2021 39