Since its rise in the 1950s, so much has changed in the aerospace industry. Gone are the days where pressurization issues, engines requiring frequent maintenance, and impeding weather would disrupt air transport.
In 2015, Boeing reported that the world’s freight and commercial fleet totaled 21,6001 aircraft units, and this is projected to double in number by 2034.
Much of recent growth in commercial aviation can be attributed to globalization, powered by emerging markets, according to Chris Buono, the managing director of UPS Philippines.
Asia is expected to become the world’s largest travel market in the next 20 years, accounting for nearly half of the world’s air passenger traffic. This exponential growth of the industry will require expanded capacity to support the maintenance of existing fleets and the delivery of new aircraft orders.
“Today, many Filipino aerospace companies are involved in manufacturing and assembling components and sub-assemblies for interiors and flight control systems, and in maintenance, repair, and overhaul activities. These components and sub-assemblies are then distributed to the biggest export destinations, the US and Europe,” Buono said.
The industry supports about 8,600 employees, of which 3,000 are in aerospace activities, another 3,000 in supplier operations; and 2,600 in aircraft MRO.
While this accounts for less than 1 percent of the Philippines’ overall workforce, employment within the industry grew 300 percent from 2007 to 2014, resulting from 25-percent growth in global trade in components and sub-assemblies for the same period.
“The increased demand for industry-specific skills makes it critical to equip Filipinos with varied engineering backgrounds that would enable them to effectively contribute to the existing workforce,” Buono said.
With a compounded annual growth rate of 42 percent from 2012 to 2016, among the fastest in the Asia-Pacific region, the Philippine aerospace industry is being groomed by the Department of Trade and Industry to become the region’s next aerospace manufacturing and MRO hub. Beyond offering international aerospace players another potential hub in the region, the sector’s success also creates high-quality and sustainable jobs for Filipinos.
The manufacturing sector of the Philippine aerospace industry only began its expansion in the past five to ten years, with substantial earnings of $604 million recorded in 2014 due to aerospace manufacturing exports. This shows that even as this sector is still relatively new, it has the potential to become a significant player in the global marketplace, Buono said.
At present, there are four aerospace original equipment manufacturers, eight repair stations certified by the Federal Aviation Administration, and 19 supporting tier suppliers for aerospace in the country.
The question is: what’s stopping the Philippines from increasing these numbers and making a bigger impact on the global aerospace and aviation community?
Deficiencies in regional aviation infrastructure, inadequate facilities, safety management issues, high taxation, and limited investments in air transport are some of the challenges that local aerospace players struggle with.
“To facilitate growth, we need to adopt capacity building policies that future-proof the aerospace industry and the supply chains they contribute to,” he said.
“Technology will continue to drive evolution in the manufacturing industry, the same way it’s changed consumer behavior. The challenge is to remain future-forward by prioritizing innovation. This will assure that the Philippine aerospace industry will fulfill its potential to be a major player in aerospace manufacturing, MRO, and aircraft maintenance in Asia Pacific,” he said.
Demand for air-freight is rising and with the cargo market’s revival, older 747 models now have a renewed purpose – helping make global trade happen.