[Avionics Today March 14, 2014] The Aircraft Electronics Association (AEA) released its 2013 year-end avionics market report at its annual convention showing global General Aviation (GA) avionics sales reaching more than $2.4 billion last year, a 6.9 percent increase over 2012.
This is the second annual avionics market report released by AEA, capturing sales of all business and GA aircraft electronics, including all component and accessories in cockpit/cabin/software upgrades, portables, non-certified aircraft electronics; all hardware (tip to tail), batteries and chargeable product upgrades from the participating companies.
Not included in the report are repairs and overhauls, extended warranties or subscription services.
AEA President Paula Derks said the numbers were a good sign for the industry given the uncertainty surrounding the global economy, with the U.S. improving while Europe continues to recover from the downturn in 2012 and emerging economies in Latin America and Asia remaining inconsistent with expected performance in those regions.
"We were pleasantly surprised given the state of the economy," said Derks in an interview with Avionics magazine. "I think probably a lot of it has to do with innovation of the avionics manufacturers that they continue to shock all of us and surprise us. In flight entertainment, that’s making some money, the data communications, the explosion of technology in that field and then just the glass cockpit technology."
The report features sales figures from 21 participating AEA member companies, which includes some of the avionics industry's biggest names such as Rockwell Collins, Garmin, Honeywell and Universal Avionics along with smaller and younger manufacturers like FreeFlight Systems and Aspen Avionics.
Derks said another surprising aspect of the report is how close the market is in terms of forward fit and retrofit sales. In 2013, forward fit sales involving original equipment on new aircraft accounted for 56 percent of total worldwide sales. The AEA president attributes the balanced market between forward fit and retrofit to a trend of more pilots choosing to upgrade their older aircraft versus purchasing new ones.
"As long as they can fill the cockpit with the newest technology, you’ve got 30 or 40 year old airplanes with glass. It didn’t use to be that way," said Derks. "We love the sale of new airplanes because it trickles down to our industry … but I think right now it’s cost, they’re saving by saving their existing aircraft and update the cockpit so that [it’s up to date]."
The majority of those forward fit sales went towards the purchase of large business jets, turboprops and piston aircraft, as shown by the annual shipping and billing numbers for GA aircraft
released by the General Aviation Manufacturers Association (GAMA) in February. GAMA's report showed increased demand for those aircraft types while sales of light and medium business jets were on the decline last year.
Derks said that the report is still in its infancy stage and that AEA will look to add more trend analysis as they gain more information years. But the importance of the report is the value it provides to avionics manufacturers when talking with lawmakers about regulation or investors that can help expand their companies.
“The whole reason behind us creating this report was to, when our manufacturers are perhaps talking to Wall Street or talking to venture capitalists or the association is talking to Congress about our value to the economy, these figures will help us tremendously," said Derks.
"When we're talking about future FAA funding, giving the congressmen the knowledge of the industry, it’s absolutely valuable, it’s something that’s never been available," she added.