IMF Meeting Paris AIR SHOW 2011 Syndex

Transcription

1 IMF Meeting Paris AIR SHOW 2011 Syndex Nom de la société - nature de la mission - date

2 2 Quick introduction: Who are we? What are we talking about? Our business and our specific characteristics: unlike many other organisations, we work only for employee representatives and this gives us a unique position at their service 400 consultants 40 years of experience at the service of employee representatives In France, with works councils With trade unions in Poland, Spain, etc. In Europe, with European works councils and the EMF Regular European studies Hundreds of assignments to provide insight into market dynamics, corporate strategies and their impact on employment Specialisation in the aeronautic sector

3 3 Demand is positively oriented, but its structure is evolving Demand and its evolution: The air transport market faced with cyclical trends The main air transport players: different challenges The general situation of airline companies, effects of the crisis, conditions for recovery The main air transport geographic markets American airline companies: Regression of the main global market Slowdown of the European market Outlook of Chinese and Indian markets Future of leasing companies Alliances and their role in current and future groupings etc.

4 4 Air traffic reports long-term growth Source: ICAO * Compared to 2000

5 5 Air traffic shows long-term growth... Source: Airbus * Compared to 2000

6 6 all the while changing its structure Source : Airbus * Excluding China, India and Japan

7 7 Supply and its evolution: towards a new top of cycle, but with new dynamics (1) Aircraft manufacturers: towards a new top of cycle? Widebody aircraft, regional aircraft, business aircraft: changes in business positions and outlook Airbus / Boeing: a lasting balance? Duopoly challenged by China, Russia, etc. On-going new major programmes (A380, B787, A350): fortunes and misfortunes Bombardier/Embraer: domination of Embraer on regional jets Newcomers to the 100-seater market Bombardier/ATR: the energy crisis has favoured the turboprop airliner Conditions of growth of business aviation

8 8 Supply and its evolution: towards a new top of cycle, but with new dynamics (2) Engine manufacturers: OEMs with a special status Different product ranges Change in commercial positions Equipment manufacturers: specialists or OEMs etc. A very diversified sector comprising some 15 businesses Major global players Role of new programmes in the sector's development

9 9 For Air Transport, the crisis has been "moderate" Airbus Boeing Total After a two-year drop, order are rising again in International fleet in service in 2009 Long Range : 57% Boeing, 32% Airbus Single Aisle : 64% Boeing, 28% Airbus Boeing Airbus The crisis had no impact on deliveries, at a level close to the 2009 record A new record year for deliveries Airbus Boeing Total

10 10 Impacts for business jets and regional aircraft, difficulties linked to military business

11 11 New programs to be rolled out soon

12 12 The medium-term sales outlook is bright

13 13 And even much better than forecasts made 18 months ago Forecasts of Single Aisle delivery by Airbus Autumn 2009 forecasts Spring 2010 forecasts Autumn 2010 forecasts

14 14 At the same time, the sector's structure is changing A pyramidal organisation Players Function Clients Airline companies Leasing companies Order originators Aircraft manufacturers Architecture and overall design, production, integration of subassemblies and sales relations Tier 1 equipmen t manufact urers Engine manufacturers Avionics Development, production and integration of subassemblies Tier 2 equipmen t manufact urers System developers (oxygen, fuel hydraulics, electric, etc. Development and production of systemes and modules Subcontractor Suppliers of sub-syst. Production of sub-syst. quipment manufacturers and components and components

15 15 Manufacturers are no longer employing a large majority Profondeur du «cœur de métier» FAL FAL Architecture Design d ensemble Lignes d assemblage final Intégration Comp. principaux Aérostructures Intégration Comp. principaux Caisson de voilure, équipemt pointe avant, HTP, VTP, bords de fuite,etc) Aérostructures Pointe avant, ailes, tronçon central Intégration/montage composants et systèmes majeurs (voilure, cabine, etc) Assemblage composants d aérostructure (tronçons, ailes, empennage, pylones, etc) Equipements et sous-systèmes Equipements et sous-systèmes Conception, fabrication équipements et systèmes 75% du B787 externalisé) AIRBUS (50% de l A350 externalisé)

16 16 and the trend continues Geographical shift in demand Low exposure to cycles/additional activities Increases in activity are absorbed by a geographical shift: multi-domestic operations Strong exposure to contingencies and pressure on costs Strong pressure on low-cost delocalisation. What effect on Europe's industrial and technological base?

17 17 Stepping up of the deverticalisation/externalisation duo Strategy of refocusing on the core business and externalisation in cascade along the value chain Desire to share industrial and commercial risks with suppliers Desire to guard against cyclical trends by transferring the impact of the fluctuation of rates, Creation of competition among traditional suppliers and globalisation of players (in particular, between the United States and Europe) etc.

18 18 Acceleration of offshoring and relocations Desire to develop purchases in the dollar zone to reduce net exposure Strong pressure on purchase prices of from equipment manufacturers and subcontractors, with imposed targets of a 5% decrease in costs per year in addition to a reduction in the number of suppliers Commitment to obtain supplies from countries with low labour costs, and all the more so if they are growth drivers etc.

19 19 Aeronautic sector: potential size of offshoring depending on segments Civilian Widebody High Highly competitive and globalised Regional High Highly competitive and globalised Business Low Market segment Helicopters Medium Low volumes and very scattered market Military Aircraft Low Strategic Helicopters Low Strategic Space Launchers Low Strategic Load Low Strategic

20 20 Aeronautic sector: potential size of offshoring depending on function Main functions Main risks Design Research and development Will continue to be localised with order originators who have the end market relation Transfer via the partnerships required to access new markets, subcontracting in some fields Support & purchasing function Creation of centres for monitoring local production capacities (e.g. CPIA at Snecma) and managing purchases Production Integration and assembly Maintenance Location in low-cost countries of additional capacities positioned on products with low added value Will continue to be localised with order originators except in the case of opportunity markets and end- of- life products Creation of maintenance centres in low-cost countries (e.g. Sogerma) or closer to clients (e.g. Snecma Services)

21 21 Becoming a Tier 1 company leads to a change in competencies in groups: example of GKN The value chain Tier 1 : GKN s ambition Tier 2 : GKN today subcontractor

22 22 What is good for manufacturers is not always good for jobs: example of the United Kingdom Employment drops while business volumes soar Up to what extent? Not forgetting the change in professional skills

23 23 A major challenge to maintain skills: example of France

24 24 Problems and strategic challenges of the sector (1) Will the overall impact of the crisis be a lasting one? The issue of the euro/dollar parity and oil prices Civilian aeronautics: a dollar market A critical element for the entire European industry Sharp fluctuations in fuel costs Taking into account of the globalisation of production The diversification of the client base of equipment manufacturers and its consequences Emergence of new competitors and the concentration of segments Case of China, Russia and Brazil What support for R&D?

25 25 Problems and strategic challenges of the sector (2) Environmental issues Commercial aviation and environment What imperatives for the sector? Renewal of the B737/A320 tandem: a strategic but crucial challenge, but one that is continually postponed Aircraft, engine and equipment manufacturers faced with renewal How many more years will developed countries keep up their technological lead.

26 26 The centre of gravity of the world economy is shifting High GDP growth: BRIC, Asia, emerging countries Who have industrial strategies Who have massive public investments Who represent priority markets for the aeronautic sector

27 27 The next challenge: enhancing the relocation of Prime and Tier 1 companies in low-cost countries by joining them?

28 28 An opportunity: environmental requirements Massive investments in "clean" and "efficient" technologies Technological advantage to maintain the commercial lead Replacement of A320/B737: engines, fuel? Composites Electric aircraft Development of new skills For the moment Timid reaction of OEMs (deferral after 2022/2025) France is lagging behind