While in 2009 the Andalusian aeronautical sector managed to overcome the hardship of the international economic crisis with an 8% increase in sales, in 2010 turnover increased by 26% to reach nearly 2 billion euros (1.983 billion euros), four times industry figures in 2001. Employment also continued its upward trend, with an interannual increase of 10% to reach a total of 10,278 employees in the sector during 2010.
The Andalusian aeronautical sector is going from strength to strength despite the current international economic situation. For yet another year, it has emerged as one of the most improved regions in the Spanish and European aeronautical industry in terms of turnover and employment. Far from suffering the consequences of the financial crisis, the data provided by the Statistical Report on the Andalusian Aeronautical Sector for 2010 prepared by the Hélice Foundation with the collaboration of Aertec demonstrates that the industry is continuing its process of growth, expansion and diversification and is becoming one of the strategic sectors with the greatest potential for the Andalusian economy.
The Andalusian aeronautical industry increased in terms of sales, employment, diversification, productivity and even R&D investment, reflecting the widespread adoption by the sector of the key steps required to reinforce its position in the world aeronautical market. Turning to the figures, sales reached 1.983 billion euros, 26% more than in 2009, a year which was also characterized by an increase of8% despite the crisis. This growth means that over the last decade the turnover of the Andalusian industry has multiplied by four, from 495 million euros in 2001 to nearly 2 billion euros today.
The Andalusian turnover now also accounts for 24.1% of the total national sales, an increase which if it continues will consolidate the region’s status as the third major European aeronautical hub and the second in Spain after Madrid. The growth of sales in 2010 was mainly due to final assembly companies (which increased by 40.7%), assembly of major structures (with an increase of 28.1%), and services, testing and space (67.8%). In terms of employment, the upward trend continues. While 1,200 jobs were created in 2009, last year this figure increased by 10% to 1,452 jobs.
The sector now accounts for 10,728 jobs, 2.7 times more than in 2001. As a consequence, Andalusia’s importance in the national employment figures has continued to grow to reach 24.7% of the total.
Greater diversification and productivity
This growth is especially interesting due to the quality of the advances made. For example, the sales increase is not only for Airbus products, with a continuation of the gradual increase in diversification to include products by other manufacturers such as Boeing, Embraer and Bombardier. Sales to these other manufacturers increased by 41,6% in 2010, with increased participation in the total turnover to 23%, as opposed to 5% in 2001. The report also revealed that products by Airbus Spain experienced positive growth in 2010 following the decrease in sales of Airbus aircraft in 2009, while Airbus Military products have maintained their level of growth from the previous year.
This represents confirmation of the efforts by the Andalusian industry to continually advance with the diversification of customers and products at an international level, reducing its level of dependency upon a single customer and improving its internal balance. In terms of employment, this growth also has greater added value due to the particular emphasis on highly qualified professionals, with a 12% increase of jobs for management, engineers and university graduates. The area with the biggest employment growth was engineering, with a 40% increase.
Major manufacturers and auxiliary industry
The Andalusian aeronautical sector currently includes 123 companies, of which more than 90% are concentrated in the Seville-Cádiz area as was the case last year, ratifying this zone’s status as the engine of the Andalusian aeronautical industry.
Of these, 30% are mechanical companies, 17% offer engineering and consultancy services and 13% are involved in assembly.
The remaining companies work in the areas of composites and plastics, electric and electronic supplies, testing and technical analysis, general aviation, space and services. An analysis of the major manufacturers in the industry reveals that their turnover increased by 375 million euros compared to 2009, a 35.6% increase fuelled by the 40.7% sales increase for Airbus Military.
Employment, however, dropped slightly by 2.9% to 2,817 jobs. As a consequence, productivity understood as “turnover per employee” increased in general for the major manufacturers by 40% and 45% in the case of Airbus Military.
The Andalusian auxiliary industry increased its turnover by 6.5% compared to the previous year (more than 555 million euros as opposed to 488.4 million euros for 2009) and 15.4% in terms of employment (1,655 more jobs). noteworthy among these new jobs is the significant increase in engineering staff. More specifically, the increase in engineering and R&D staff has boosted the numbers of highly qualified staff from 21.6% in 2009 to 23.3% in 2010. Another optimistic figure is the investment in R&D by the auxiliary industry, which doubled in just one year from 4.3 million euros in 2009 to 9 million euros in 2010.
The companies involved in ‘large assemblies’ and ‘complementary industry’ were responsible for 27.7% and 44.13% of the total investment respectively. The only downside for the auxiliary sector is the decrease in turnover per employee (around 8%). This makes improving productivity a priority objective for these companies, incorporating activities with greater added value as a way of combating the threat posed by emerging countries with significantly lower labor costs.
A promising future
The Statistical Report on the Andalusian Sector for 2010 prepared by the Hélice Foundation with the collaboration of Aertec concludes that the future of the Andalusian sector is fairly promising, not only due to the figures but also the nature of the improvements made.
The gradual concentration of companies is enabling them to improve their solvency and increase their expansion in the national and international sector. Similarly, its activities are diversifying towards wider fields than traditional areas such as aerostructures and developing new areas of interest such as unmanned aerial vehicles and systems, a field in which the Center for Advanced Aerospace Technologies (CATEC) is developing some of the most innovative and advanced research lines in Europe. Another positive aspect is the fact that in the last quarter of 2009 a Tier One company was established in Andalusia, Alestis Aeroespace.
This was a necessary step in order to continue to opt for new and larger obs which will benefit the entire Andalusian business network.
The creation of Alestis has attracted important work packages for the A350 and its impact on sales is already evident in the figures for 2010. It is also noteworthy that the A400M program has consolidated its presence after the first flight in late 2009, as is evident from the results obtained by Airbus Military in 2010.
Similarly, the positive evolution of R&D investment and direct employment associated with R&D confirms the positive effect of the activities being carried out by the Center for Advanced Aerospace Technologies.