Aerospace Engineering Services Outsourcing Market Projected To Exhibit Robust CAGR of 25.9% For The Forecast Period From 2019 To 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demand for the replacement of aging and outdated aircraft and the intensifying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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