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SOARING HIGH

A return to profitability will be possible in 2023
he aviation industry is looking at its most optimistic economic
outlook for some years. For the first time since 2019, the
T International Air Transport Association forecasts a return
to (slim) profits for airlines in 2023. There are some key devel-
opments that will shape aviation success, explains Rob Mather,
Vice President, Aerospace and Defence Industries, IFS. Here he
picks five top areas of opportunity for the industry—from new
manufacturing principles to new methods of travel both on earth
and beyond, not to mention a few maintenance and sustainment
challenges en-route. Rob Mather, Vice President, Aerospace and
International Air Transport Association (IATA) figures for 2023 Defense Industries at IFS
paint a promising picture of aviation tipping back into profitability.
Airlines are expected to post a small net profit of $4.7 billion—a metal component for the IAE-V2500 engine’s
0.6 per cent net profit margin, the first since 2019. Fitch Ratings anti-icing system, developed at Lufthansa
corroborates this industry growth across the aviation ecosystem, Technik’s Additive Manufacturing (AM) Center,
expecting deliveries of large aircraft to increase 20 per cent versus has now received its official aviation certifica-
2022, with production rates increasing by end of FY 2023. It also tion from the European Union Aviation Safety
expects aftermarket sales and maintenance, repair and overhaul Agency (EASA). There are clearly further reg-
(MRO) servicing to benefit from an expectation of global air traffic ulatory hurdles to overcome, but with a focus
returning to near 2019 levels. on local suppliers as part of improving the
Although positive, these profit margins are razor thin, so the slight- resiliency of the aviation industry supply chain,
est of marginal gains across multiple touch points in the aviation additive manufacturing has a role to play.
value chain are essential to exploit. There are five growth oppor- Prediction 2: The commercial space race
tunities impacting the aviation sector in 2023 where profits are is on – increased space travel and satellite
to be made, on a micro to macro level. infrastructure drive commercial space market

Prediction 1: One-third of aerospace organisations will diver- growth of over 30 per cent in 2023
sify their supplier base – supply chain nearshoring and Additive In 2023 we’re looking at a new kind of space
Manufacturing will boost value for airline operators race, this time commercially, not militarily

One of the biggest ripples still resonating across the aerospace and driven. NASA and SpaceX both have lunar visits
aviation sectors, is the need to shore up unstable supply chains. in their sights. The widely covered NASA Artemis
In its latest Aerospace & Defence Industry Outlook, Deloitte sees Moon Mission will eventually include a crewed
an acceleration in the shift from global to regional sourcing in lunar landing. Meanwhile SpaceX is targeting
2023, including the exchange of raw materials, parts, and finished making lunar orbits more accessible with its
A&D goods globally. To avoid concentration risk, Deloitte expects Starship spacecraft and Super Heavy rocket.
aviation organisations to make supply chain diversification a top Its dearMoon mission is a weeklong journey
priority, including local sourcing and nearshoring. One of the meth- containing a crew of artists, content creators,
ods that is tailor-made to aid aviation organisations as they look and athletes from all around the world that
to minimise, manage, and mitigate supply chain risk is additive will travel within 200 km of the lunar surface.
manufacturing (AM)—and it’s already showing its potential. The Other “space tourism” market entrants include
use of AM will have implications for time to manufacturing of Blue Origin and Virgin Galactic, all contributing
new assets, including aircraft deliveries and spare parts/inventory to the industry exhibiting a huge Compound
management. In fact, figures show that AM or 3D printed parts Annual Growth Rate (CAGR) of 36.4 per cent
deliver 60-90 per cent reductions in cost and lead time compared from 2022-2028.
to other manufacturing processes. Beyond space tourism, there are other areas
There are already examples of airline operators and MRO provid- of focus in the increasingly commercialised
ers embracing 3D printing for different uses. Looking to protect space sector. As the number of satellites pro-
grounded or stored aircraft, Scandinavian Airlines (SAS) could not viding critical on-earth infrastructure support
source off-the-shelf engine covers, exhaust plugs and more due to increases – for communications connectivity,
ongoing supply issues. It took the decision to partner with a local navigation, weather observation etc. – Space
aviation engineering organisation that had the means to 3D print Infrastructure Servicing (SIS) or in-orbit servic-
the extremely large exhaust covers. Meanwhile, in June 2022 a ing is becoming a growing addressable market.
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