Federal Supply Code 1560: United States Department of Defense Acquisition of Airframe Structural Components

About this Study

• This report examines six years of U.S. DoD spending in Federal Supply Code (FSC) 1560 Equipment Aircraft Structural

• Companies are grouped into three tiers based upon FSC 1560 revenues over time

• Revenues rose sharply from 2001-2002, and have leveled off at close to $2 billion annually from 2003 to 2006

• The number of reporting locations has skyrocketed, rising from 484 in 2001 to 1,184 in 2006

• DoD has spent a total of $12.3 billion in FSC 1560 from 2001-2006

• It also provides a spending forecast from 2007-2011

• G2 Solutions worked from contract action data beginning in 1999 as well as another set of information characterizing DoD FSC 1560 spending from 2001- 2006.

• In its simplest form, airframe structural components markets are similar to commodity trading; through this report G2 looks at macro political, policy and force structure issues to justify a 5-year forecast

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Commercial Air Transport Avionics Market, Analysis and Outlook

• Demand throughout the forecast period will be robust with a temporary decline
  towards the later part
• There will be strong avionics upgrade opportunities in established markets such
  as the US and Europe until new narrowbody aircraft are introduced sometime
  next decade
• Near Term Outlook: average growth rate 2007-2010: 5.6%, Compound Annual
  Growth Rate 2006-2010: 4.6%
• Top three avionics OEM competitors control approximately 85% of the forward
  fit market, an increase over previous years
• Consolidation likely will continue with Tier 1 & 2 companies looking to augment
  their market role in the retrofit segment and make other acquisitions based on
  program or avionics technology-based opportunities. For example, General
  Electric’s 2007 acquisition of Smith Industries has augmented GE’s avionics
  footprint and aircraft shipset value significantly
• Market vulnerable to a downturn in aircraft orders, however replacement cycles
  and need for more efficient aircraft will moderate such an impact

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Federal Supply Code J015: U.S. Department of Defense Maintenance and Repair of Equipment/ Aircraft Structural

About this Study

• This report examines six years of U.S. DoD spending within the maintenance and repair of structural aircraft assemblies across all service branches

• It provides a six-year baseline of spending, market share analysis as well as major contracting office locations

• Research will also point to ongoing and anticipated DoD spending and contracting behavior

• Global deployments and overall DoD budget scenario are examined as contributing factors

• Where possible, major contracts are described, with an eye toward sunset and recompete provisions

  – Not all contracts mentioned will be solely applicable to JO15, as MRO contracts encompass avionics, weapons systems, engines as well as structural maintenance, modification and repair

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North American GPS Avionics Retrofit Markets

Executive Briefing Market Findings

• Garmin maintains a dominant GPS retrofit market share position, with estimated 2007 market share between 75 and 85 percent
• Lowrance and AvMap and are the only two other players of note within portable and handheld markets
• This market is still essentially limited by the number of aircraft; even with 3,500 new airframes/year the total addressable market remains stable
• There is a shrinking addressable market for retrofits in both business and general aviation, due to market saturation, equipment and installation costs and economics of upgrading aging platforms
• The trend toward forward fit GPS and/or integrated avionics suites in new aircraft further decreases retrofit opportunities through 2018 and beyond
• Roughly 3,500 aircraft/year are produced within BA and GA in North America; nearly all will have GPS and/or integrated avionics capabilities

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Airborne Surveillance: International Emerging Markets Analysis and Outlook, June 2007 (AB072)

Key Findings

• Emerging markets (Developing nations) constitute the near to medium term addressable market for affordable airborne surveillance solutions

• Company must be capable to offer affordable high technology, and reliable airborne solutions

• A strong strategic partnership essential for market penetration

• Dominant end user considerations will remain price/performance offer and the support quality that can be expected over the product life cycle

• Market is just beginning to shape up and opportunities abound with a total market value expected to exceed $3.3 billion to 2016

• Users will be very sensitive to offset benefits as well as the stability and strength of the partnership between integrators and OEMs

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Light Business Jets Avionics: Executive Summary, June 2007 (AB071)

Key Findings

• The emergence of a new line of light and personal business jets will significantly impact avionics market mix over the next five years

• The Light jets avionics market represents $4.7 billion in revenue terms from 2007 to 2018

• Growth will be moderate as prices of these new avionics suites remain low compared with other advanced avionics systems such as Proline, Primus Epic or EASy

• Consolidation is expected to continue at the second tier of the market, with tier one players seeking to expand their business activities in adjacent market segments where current core competencies can be leveraged

• The emergence of new competitors in the VLJ segment has increasingly contributed to this market fragmentation. Some of the most successful players will eventually migrate into other segments of the business aviation, military or commercial air transport markets.

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