The impact of Covid-19 on engineered aerospace
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During the Coronavirus pandemic, engineered aerospace components witnessed a sharp decline in their operations globally.
However, during the pandemic, many manufacturers have, and suppliers have managed liquidity, manage their workforces and incorporate a sizeable production ramp down.
Suppliers are advised to ensure their readiness, once airline companies start to prepare to take to the skies.
In addition to this factor, airlines may also start to reduce their air fleet and retire aircraft to reduce costs and expenditure to survive the new normal.
It is expected that the “new normal” will mean that airlines will spend less on new aircraft and repairing well-worn aircraft. Following years of extensive globalisation of many major airlines, Covid- 19 is causing an alarming aerospace supply chain shock. It is expected that this will cause significant structural risks, but it could also see the opening up of new opportunities in the aerospace industries.
Aerospace companies are now being encouraged to re-evaluate their portfolios, the scope of their operational capabilities, including; engineering, service delivery, expertise, and monitor their manufacturing footprints concerning the economic and climate pictures.
What does this imply for the aerospace sectors?
The aerospace industries’ latest intelligence indicates that there will be between a 25-50% reduction in OE demand during 2020-2028; this is dependant on the effects of Covid-19 on the travel industry and airlines.
Globally 60% of all aircraft have been grounded, which has led to many airports and airlines across the globe implementing amendments to standard operating procedures in preparation for whenever travel services are allowed to resume.
In the latest data from the aerospace and the aviation industries, it is expected that the three scenarios that they have factored in will broadly signal the ramification of the aftermath of the Covid-19 pandemic as being significant.
Strategies to restructure and realign engineered aerospace.
One of the largest aviation and aerospace manufacturers, Rolls-Royce CEO, Warren East states, “This is not a crisis of our making. But it is a crisis that we face, and we must deal with it. Our airline customers and airframe partners are having to adapt, and so must we. Being told that there is no longer a job for you is a terrible prospect, and it is tough when all of us take so much pride in working for Rolls-Royce. But we must make difficult decisions to see our business through these unprecedented times. Governments across the world are doing what they can to assist businesses in the short-term. Still, we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there.” *1
1.Rolls-Royce. “Rolls-Royce proposes major reorganisation to address medium-term impact of Covid-19.” 20th May 2020, Accessed 16th March 2021.
Conclusion
Therefore, Governments and industry must work closely together to find solutions and create the “New Normal”. For engineered aerospace and aviation industries to survive in a changing economic climate worldwide, they must embrace significant change and restructure.
