Defined as "operation whereby a contractor entrusts by a subcontractor, and under his responsibility, to another person called a subcontractor, all or part of the execution of the contract of enterprise or the public contract concluded with the client" by the Assocation Française de Normalisation ( AFNOR ), subcontracting is part of a determined production cycle as well as technical specifications required by the client. These are organized by rank ("tier" in English) corresponding to a logic of value-added flows. All subcontractors and equipment manufacturers in the aeronautics industry represent 70 to 80% of the sector's added value This is made up of a pool of 10,000 to 20,000 companies. [ Olmos Sanchez , 2016]
The activities of aeronautical subcontractors obviously depend on the dynamism of aircraft orders from the world's major aircraft manufacturers. These orders declined slightly in 2019, but are expected to be absorbed in the medium term. In recent years, the market has been characterized by a trend towards consolidation of Tier 1 OEMs The announcement of the takeover bid launched by Safran for Zodiac Aérospace in 2018, or the merger of UTC's aeronautics division (notably Pratt Usine Nouvelle ]
Domestic companies in the sector can also count on an increase in the Rafale's control rate from Dassault Aviation, which benefits in particular the engine manufacturer Thalès, the equipment manufacturer Safran and the shipowner MBDA. On the other hand, the European space industry is struggling to maintain its level of activity, like Thales Alenia Space, which plans to cut 450 jobs in France
1.2 The world's major giants
Apart from France, which is a world leader in the entire value chain of the industry, the aeronautical subcontracting market brings into competition several equipment and engine manufacturers from the four corners of the world. The American conglomerate United Technologies (***) For example, in ****, the company's total sales amounted to $**.* billion. It ...
1.3 France, a flagship of the aeronautics industry
Thalès, Safran, LISI and Latécoère are among the world's largest aeronautical equipment manufacturers and subcontractors. In ****, total national production will amount to **.* billion for the entire aeronautics and space sector, or **.*% of total production in the European Union (***). [***]
Value of production in the aerospace industry France, Germany, and ...
1.4 Determinants of the activity of aeronautical subcontractors
The table below summarises the different determinants of the activities of aeronautical subcontractors. For each criteria, a forecast for the development of the aeronautical subcontracting market is given for the following year.
1.5 Consequences of VIDOC-19 on industry in France
This interview was conducted by a Businesscoot analyst with a leader of a company specializing in technical fabrics for industry
What is your market and what are your expectations regarding the VIDOC-** crisis?
We specialise in technical textiles for industry. We are present on several fields:
Recycling of technical fibres intended ...
2.1 Airbus and Boeing aircraft orders
In ****, for the first time since the crisis of ****, Airbus' orders were lower than its deliveries with *** orders for *** deliveries that year. Boeing, on the other hand, took *** new orders in ****. Both of these results are down compared to ****, which was an exceptional year for both aircraft manufacturers, with a combined ...
2.2 World military expenditure
Military aviation is a large part of the French aeronautics industry since it represents about **% of its production in value. In ****, worldwide military expenditure will have increased by *.*% to *,*** billion dollars **.*% of these expenses are incurred in the United States This is far behind China (***). [***]
Worldwide military spending World, ****-****, ...
2.3 Air freight
Air freight activities within the European Union have grown very little over the last ten years: in ****, the estimated turnover of companies in this field represented **.* billion, **.* billion in ****. [***]
On a global scale, air freight transport, measured in billions of tonne-kilometres carried by the ICAO has, however, been rising steadily over ...
3.1 Characteristics of the entrepreneurial fabric of the aeronautics sector
According to the Gifas In ****, the aviation and space industry would generate ***,*** direct jobs in France In ****, **,*** people will be recruited and *,*** new jobs will be created, with engineers and managers accounting for **% of them, employees, technicians and supervisors representing **% and skilled workers **%.
The employment pools are at **% in Occitania (***), there ...
3.2 Value chain
The aerospace supply chain involves several thousand companies, from spare parts manufacturers to maintenance and repair operators.
The chain is structured around the manufacturers. These are large companies in general, which are the principals; their supply chain is made up of suppliers, subcontractors and service providers in the aeronautics and ...
3.3 Challenges for the subsidiary
Subcontractors often find it difficult to adapt to the demands of increasing production rates, shorter delivery times, intransigence on quality control, and downward commercial pressure on prices Builders are subject to « the scissor effect The "slower pace of old programs, before taking advantage of the rise of new programs (***).
Overheating productive ...
3.4 Geography of subcontracting
To minimize production costs and find new pool of qualified personnel, the players in the sector often relocate part of their production abroad On July *, ****, SAFRAN opened a new production site in Poland, for a total investment of **M€. This new plant, employing *** people, focuses on the production of ...
4.1 The challenge of increasing the pace of supplier ramp-up
The growth of the aeronautics market goes hand in hand with the obligation to increase the production capacities of the various suppliers in the aeronautics value chain. In the case of Airbus deliveries, for example, the rate of production of tier * suppliers is still the limiting factor. [***] But it is SMEs ...
4.2 The main expense items
Changes in the weight of raw materials and supplies, and personnel costs France, ****-****, in % Source: Info Greffes des Tribunaux de Commerce, repris par Orbis News Out of a sample of ** equipment manufacturers with a turnover of between ** and *** million euros (***), the weight of raw materials has tended to increase, indeed, ...
4.3 Intermediate management balances
Based on the same sample of aircraft equipment manufacturers as in the previous section, a study of interim management balances normalized to revenue shows an increase in net operating income (***) over the past six years, in contrast to a decline in gross margin over the ****-**** period. Net income, which stood ...
4.4 Decrease in Working Capital Requirement (WCR)
In ****, the WCR of the operators in this same sample decreased by *.* days of turnover compared to ****. This change is explained by a decrease in customer lead times and an increase in supplier lead times. However, the inventories of these same companies increased in ****.
Customer delays, stocks and suppliers of aeronautical ...
5.1 Text of law relating to subcontracting
In France, the law n°**-**** of ** December **** on subcontracting gives the organisational arrangements between subcontractors and subcontractors. This law has been successively consolidated by several other laws and ordinances, the most recent being the ordinance n°****-**** of November **, **** ...which is the legislative part of the code of public procurement. ...
5.2 The EN9100 standard
This quality standard was recently reviewed for the entire aviation sector. This international standard, the most widely used in the aeronautics and space sector, aims to take better account of the constraints on the subsidiary's players, while guaranteeing ever greater safety in aircraft.
Among the major changes, the responsibility of each ...
The companies presented below, in summary form, represent a sample of the largest suppliers, equipment manufacturers and engine manufacturers in the aeronautics sector in France.
6.2 List of enterprises included in the compilation of statistics
The various statistics concerning the intermediate management balances, turnover requirements and expense items presented in the "Analysis of the Offer" section have been drawn up on the basis of the financial data of the following companies:
ACE Aerospace Aero ** Aero Gearbox International Alkan Alsenam Ami Metals France Athos Aeronautics Auxitrol Aviacomp ...
- Mecachrome Groupe
- Figeac Aéro Groupe
- Stelia Aerospace
- Le Piston Français
- Lisi Aerospace groupe
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