Many fields experience stable operations over a series of years, even a decade, but the aerospace industry is definitely seeing its own share of changes as the time progresses. From the space perspective, the past few decades have seen new entrants to the market, as well as new advances in technology and the emergence of the Commercial Crew program. While in 2020, the general aerospace industry would have envisioned a long term demand for commercial aircraft, emergence of conditions such as Covid-19 have led us to be more careful in our predictions for the industry and allow us to recover from the current loss.
The Covid-19 pandemic has caused major disruptions to the aerospace and defense industry. The aim for many corporations now is to figure out how to recover and thrive from these changes in their schedule. With the need to be able to navigate the changes, the ability for organizations to pivot in order to thrive will be paramount to remaining profitable in the current era. The commercial aerospace sector was significantly affected by the Covid-19 pandemic. With the pandemic, and the WHO mandates for social distancing, the commercial aerospace sector has significantly experienced a downturn in its operational activity. Identifying how to keep the industry afloat and also protect sectors such as the defense sector, will be one of the priorities for 2020 and beyond.
It seems as if in some instances, the two sectors of the aerospace industry are behaving oppositely in terms of their reaction to the pandemic. The defense sector seems to be at a new high, while commercial aerospace is on a downward trend for 2020. With the improvement in global health conditions, the commercial aerospace industry is expected to recover with time. People still want to travel, and will do so when they feel that it is safe for them to.
Defense Sector Influences:
The defense sector thrived in 2019, and 2020 with the increase in security threats induced by various external factors and the pandemic. Consulting studies have shown that up to 4% growth is anticipated in 2020. The army as an entity is actually taking the steps to make their military systems more modern. In some instances, such as the United States, defense is more than just on Earth border control, there is a space defense that requires the utilization, manufacture and launch of satellites in order to ensure that the country is protected from external missile attacks.
Commercial Aerospace Impacts
The commercial aerospace industry is expected to eventually recover once the pandemic subsides. With the demand from airline customers on the lower side, there is also the production delay that was induced by supply chain disruption. An order backlog of commercial aircraft was also decreased due to various factors. With the restoration, there is an anticipated long term demand boost, with a vision to produce 40,000 units within the next two decades.
Military Equipment Sales
In the US, the ability to explore military equipment is also a major benefit to their operations. With global threats always a possibility, the sale of US foreign military equipment to meet the demand of such a possibility showed an increase. 2018 and 2019 saw sales of equipment up to US $56 million dollars. At this rate, the global defense spending is actually expected to increase, as new opportunities are being created for defense contractors and the ability to supply countries, and increase their military facilities increases.
The Space Arena is always an exciting arena to be involved in. With new and steady investments after the success of the current Commercial Crew Missions, new funding opportunities are coming in from governments and venture capital firms. With current investments and revenues being generated from the launch of satellites, there is an anticipated growth of the sector as the launch capabilities improve, and costs reduce. Business model optimization is definitely underway in the sector, and with the ability to do ventures in a collaborative effort, it will be possible for anticipated growth to be sustained. 2020 brought many changes, and even in the pandemic, critical missions were accomplished, though they took a much more careful approach to enable those to be so.
Fluctuations are anticipated, and the key is to ensure that organizations understand how to navigate each phase. The pandemic is an era that we never anticipated, and the key is to proactively adapt.