Spare Parts For the Aviation Industry in Australia - myassignmenthelp

Question: Discuss about theSpare Parts For the Aviation Industry in Australia. Answer: SBU Situation Analysis l - Brief Summary of Relevant and Major Changes and Trends That Have Occurred Within the SBUsIndustry Over the Last 5-10 Years The Australian airline industry depends mainly on imports of SBU. The cost of SBU increased during the past three years as a result of the Australasian dollar depreciation. The spare parts industry as well as the rest of the components of the aviation industry needs the governmental support to develop a niche business to improve the outcomes for all stakeholders. Improved mechanisms can help the spare parts industry to nourish within Australia once again (Western Australian Indigenous Tourism Operator Council 2017). The Australian imports of parts of aircraft helicopters recorded $1691 Mn. in 2015, then it fell by 28.7% in 2016, recording $1122 Mn. which is below its value in 2014, as shown in table (1) Table (1): Imports of Aircraft parts by type (A$ million) 2014 2015 2016 % share 2016 % growth 2015 - 2016 Aircraft 2,100 2,867 1,205 30.8 -58.0 Helicopters 362 883 1,460 37.3 65.3 Parts of aircraft helicopters 1,183 1,691 1,122 28.7 -33.7 Other 110 74 128 3.3 72.6 Total Aircraft, spacecraft parts 3,756 5,516 3,916 100.0 -29.0 Based on ABS UN merchandise trade data on DFAT STARS database and Global Trade Atlas. The top source of Australian imports of aircrafts, spacecraft, and related parts is the USA with 64% share among exporters in Australia in 2016, and in the second place comes Italy with a share of 8.7% (Western Australian Indigenous Tourism Operator Council 2017). Accordingly, Australia does not diversify its major sources of aircraft imports. 2 - The Relevant Changes and Trends in The Macro Environment That Have Occurred within theSBUs Industry It is important to analyse the macro environment of the spare parts of the aviation industry, the PESTLE analysis is as follows: Political: The Australian government is not highly involved in the spare parts of the aviation industry. More efficient planning processes are needed to enhance the growth of the SBU. Economic: SBU of the aviation industry is part of an entire ecosystem of that provide aviation fleets, services, technical training, and maintenance (Boeing 2015). The devaluation of the Australian dollar negatively affected that manufacturing sector as a whole in Australia, and the aviation sector as well. Social: Efficiency and safety of the spare parts affect the safety of customers. The Civil Aviation Safety Authority (CASA) ensures the safety of passengers through its certification process (The Australian Aviation Associations Forum 2016). It is important to keep the maintenance, and safety of the aircrafts in the future. Technological: The Australian aircraft fleet is old, accordingly, it represents a limited opportunity for parts producers within some aircraft models. There is a high complexity through the large number of supply chain partners for Original Equipment Manufacturer (OEM) parts (T Kearney 2010). New technology is required to save the industry in general and the spare parts in particular (Deloitte 2017). Environmental: There is an ability to create a pooling of parts in the domestic market, as Australia covers the large area. Also, demand from different countries is continuing in the summer and winter seasons (U.S. Department of Commerce - The International Trade Administration 2017). Different weather conditions in the world guarantee the customer demand for spare parts. Legal: the Australian market is easy to penetrate, as its legal protection is not high (S. Department of Commerce - International Trade Administration 2016). This explains the heavy dependence on the imported spare parts. 3 Analysis of Market Performance in Which the SBU is Operating The Australian domestic aerospace industry total revenues recorded $4.4Bn. in 2013, the aircraft parts, maintenance, and military aircraft and parts share represented 30-33% of the total revenue for the industry. Many manufacturers in Australia are suppliers for non- Australian aircraft programs. Qantas is the leading manufacturer of commercial aviation in Australia, followed by Virgin Australia. Boeing Australia is the largest workforce outside the USA. Australia is a partner of the F-35, and 11 of the aircraft repair stations operating in Australia have certificates from the FAA (U.S. Department of Commerce - The International Trade Administration - 2017). Its market share in Australia is 26%, its revenues represent $742 Mn. The total market size of the spare parts industry grew from 4380 thousand dollars in 2014, to 4631 thousand dollars in 2015, then deteriorated to 4625 thousand dollars in 2016, and it is estimated to grow to record 5180 thousand dollars in 2017. The local produ ction also grew from 3330 thousand dollars in 2014, to 2800 thousand dollars in 2015, to 2840 thousand dollars in 2016, and it is estimated to grow to record 3000 thousand dollars in 2017, as shown in table (2). 2014 2015 2016 2017 (Estimated) Total Market Size 4380 4631 4625 5180 Total Local Production 3330 2800 2840 3000 The Australian SBU industry represents a mixture between the small and medium sized enterprises that supply spare parts, expertise, and engineering services. The firms operating in the local market are specialized in maintenance, airport systems, aero engine, avionics, airframe component manufacturing, infrastructure, and engine component manufacturing. The commercial aircraft maintenance is carried out by a selected group of specialists. Australia is a major market for spare parts in Asia and a key distribute to its markets. It has more than 700 parts manufacturing and parts distribution organizations, maintenance, design, and design. The SBU is segmented to include the products needed by the defence contracts, Qantas fleet upgrade, parts, repairs and maintenance, business jets, helicopters, aerial agriculture, Aerial Vehicles (UAVs) (U.S. Department of Commerce- International Trade Administration 2017). The best products of the aviation industry in Australia are the repair, mainten ance, andoverhaul. Key Findings The cost of SBU increased during the past three years as a result of the Australasian dollar depreciation. Improved mechanisms can help the spare parts industry to nourish within Australia once again. More efficient governmental planning processes are needed to enhance the growth of the SBU. The total market size of the spare parts industry grew from 4380 thousand dollars in 2014, to 4631 thousand dollars in 2015, then deteriorated to 4625 thousand dollars in 2016, and it is estimated to grow to record 5180 thousand dollars in 2017. SBU is highly dependent on imports from the USA. SBU Objectives and Goals The SBU in Australia requires a Bilateral Aviation Safety Agreements to be developed to enable other countries to know the Australian regulations across different countries to facilitate the export of aviation products and parts from Australia to the importing countries. The Civil Aviation Safety Authority (CASA) should eliminate the certification charges, and it has to give more support to the industry. Working close to the Australian aviation spare parts manufacturing companies, CASA will be able to develop more competitive certification processes (The Australian Aviation Associations Forum 2016). Over the next 10 years, Qantas the leader of the commercial aviation in Australia, has committed to the next generation of aircraft. The commercial aviation market prefers to source its parts from approved suppliers. It includes, different types of fixedwing UAV aircraft, and helicopter (U.S. Department of Commerce- International Trade Administration 2017). Reference List A.T. Kearney. 2010. Civil Aviation 2025. A.T Kearney. https://www.atkearney.de/documents/856314/1214502/BIP_Civil_Aviation_2025.pdf/38fc156f-2c1e-45b2-9874-9ace5c8d2402 Australian Government Department of Foreign Affairs and Trade. 2016. Australias Imports of Aircraft Parts. Australia: Australian Government Department of Foreign Affairs and Trade. https://dfat.gov.au/about-us/publications/Documents/australias-imports-of-aircraft-and-parts-2016.pdf Boeing. 2015. A New Year - A New Beginning. Australia: Boeing. https://www.boeing.com.au/resources/en-au/media/BoeingAustralia/About-Boeing/Publications/Velocity/Velocity_February_2015_Final.pdf Deloitte. 2017. Global Aerospace and Defense Sector Outlook - Growth Prospects Remain Upbeat. Deloitte. https://www.infodefensa.com/archivo/files/2017-global-ad-outlook-january_(deloitte).pdf The Australian Aviation Associations Forum. 2016. Aviation Policy. Australia: The Australian Aviation Associations Forum. https://abaa.com.au/downloads/TAAAF-Aviation-Policy-Summary-2016.pdf U.S. Department of Commerce. 2017. "Australia - Aircraft and Parts." The International Trade Administration. https://www.export.gov/article?id=Australia-Aircraft-and-Parts. U.S. Department of Commerce- International Trade Administration. 2016. Top Market Report - Aircraft Parts. USA: U.S. Department of Commerce- International Trade Administration.https://www.trade.gov/topmarkets/pdf/Aircraft_Parts_Top_Markets_Report.pdf Western Australian Indigenous Tourism Operator Council. 2017. Inquiry into Regional Airfares in Western Australia. Australia: Western Australian Indigenous Tourism Operator Council. https://raaa.com.au/raaa_site/wp-content/uploads/2017/08/RAAA-Response-WA-Inquiry-into-Regional-Airfares.pdf