Aerospace Engineering Services Outsourcing Market Market Expected To Witness A Substantial Growth Of $188.24 Billion By 2025: Grand View Research Inc.
The global aerospace
engineering services outsourcing market
size is anticipated to reach USD 188.24
billion by 2025, registering a CAGR
of 25.9% over the forecast period, according to a new report by Grand View
Research, Inc. The increased demand for the replacement of aging and outdated
aircraft and the intensifying need to reduce operational costs are expected to
drive the increased global demand for aerospace engineering services
outsourcing (ESO) over the forecast period. Owing to the increasing engineering
and technological complexities in the industry, Original Equipment
Manufacturers (OEMs) are facing the growing need to outsource some of their
services to specialized aerospace Engineering Service Providers (ESPs).
Outsourcing a variety of engineering services can help manufacturers reduce
their operating expenses and simultaneously harness the domain-specific skills
of these ESPs.
Factors such as a flourishing
middle-class population, increasing per capita incomes, and positive GDP
outlook in emerging economies of Asia Pacific, particularly India and China,
are generating more demand for air mobility. Countries in the region are
investing in aircraft manufacturing and aftermarket maintenance, repair and
overhaul (MRO) services to address this increasing demand for civil aviation.
Owing to this, the region is anticipated to witness a substantial increase in
fleet and MRO spending, thereby driving the market.
The growing deployment of connected
devices in aircraft has introduced the risk of intellectual property theft and
cybersecurity concerns. OEMs, worldwide, are taking measures for data security
and are expected to continue emphasizing on safeguarding crucial business
information. Managing the innate vulnerabilities, which are a by-product of
growing digitization, is also of utmost importance from the point-of-view of
aerospace OEMs. As a result of this, security & certification services
offered by ESPs are anticipated to witness significant traction over the
forecast period. ESO, short for engineering services outsourcing, continues to
acquire a larger share in the world’s total demand for aerospace engineering
services as the aerospace industry struggles with challenges such as cost
pressures, shortage of skilled resources, and an aging workforce. Soon,
aerospace companies are expected to outsource an increasing number and volume
of designing- and manufacturing-related services to reduce their operational
costs, among other factors. The increasing demand for aircraft and their
reduced half-lives are likely to lead to a notable rise in aerospace ESO activities
over the forecast period.
The aerospace industry has
significantly progressed in terms of the increased use of innovative
technologies and digital devices over the years. The consecutive rise in the
need for specialized engineering skills and expertise, which can be difficult
to acquire, retain, and internally develop, is expected to drive a growing need
for ESO activities. The growth of the aerospace ESO industry is also
facilitated by partnerships between OEMs and service providers for leveraging
cost-effective access to domain-specific technical expertise and higher
production capacities. For instance, in February 2019, Diehl Aviation signed a
multi-year agreement with Altair Engineering, Inc., establishing the company as
Diehl Aviation’s strategic computer-aided engineering supplier.
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The
need for specialized IT and core engineering services has witnessed a surge in
the past decade. Thus, apart from traditional engineering proficiencies like
drafting, modeling, and MRO of airplane parts, service providers are also
focusing on other offerings such as designing, prototyping, simulation,
testing, and system engineering for aerostructures and avionics. The trend is
likely to remain strong soon as well.
Further key
findings from the report suggest:
- Businesses are increasingly leveraging
the benefits of outsourcing services to control costs, improve the overall
quality of their products and services, and enhance their expertise across
a range of competencies
- In terms of service, the aerospace ESO
market has been segmented into design & engineering, manufacturing
support, security & certification, and after-market services. The
design & engineering service segment is projected to register the
highest CAGR over the forecast period
- The Asia Pacific and MEA regional markets
for aerospace ESO are expected to witness a substantial rise in growth
prospects over the forecast period. This can be attributed to the
increasing number of low-cost carriers in developing economies and growing
investments being done to boost outsourcing of services
- Leading vendors in the aerospace
engineering services outsourcing market are increasing usage of composite
materials for manufacturing aerostructures and components due to their
robustness and better stiffness-to-density ratios, in addition to further
focus on the optimization of turboprops.
Aerospace ESO is a dynamic market and
faces several multi-faceted challenges such as growing operating costs, rising
number of stringent environmental regulations, and a decrease in
revenue-per-person. Intense competition among key players in the aerospace ESO
industry has now shifted their focus to cost-effectiveness, innovation, and ESO.
OEMs are focusing on green aviation, optimization of engine designs, and
additive manufacturing. Advanced technologies such as structural health
monitoring and blockchain infrastructure have also made their foray into the
industry. The ensuing modernizations can improve the efficacy and security of
the supply chain, enrich data integrity, and reduce risks.
To address the growing environmental
concerns, manufacturing organizations are expected to focus more on investments
in green technology. For instance, the U.K.-based technology start-up Samad
Aerospace Ltd. is developing Starling Jet. This is a Vertical Take-Off and
Landing (VTOL) hybrid-electric propulsion aircraft for commuting. Such trends
are expected to increasingly encourage aerospace OEMs to invest in ESO. Some of
the leading players in the market for aerospace ESO are Honeywell International
Inc., LISI Group, ALTRAN, Bertrandt, AKKA, Altair Engineering, Inc., Alten
Group, L&T Technology Services Limited, Safran, and QuEST Global Services
Pte. Ltd.
About Grand View Research
Grand View Research, Inc. is a U.S. based market research and
consulting company, registered in the State of California and headquartered in
San Francisco. The company provides syndicated research reports,
customized research reports, and consulting services. To help clients make
informed business decisions, we offer market intelligence studies ensuring
relevant and fact-based research across a range of industries, from technology
to chemicals, materials and healthcare.
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More Information:www.grandviewresearch.com
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