The aerospace industry is attempting to rebound from the novel coronavirus (COVID-19), consulting firm PwC said in a report issued today.
“Until COVID-19 appeared, the emphasis for the past two decades had been on expansion,” according to a summary of the report.
“Now, the emphasis should be on liquidity and de-risking the supply chain, while planning for a return of volume in three to five years.” In particular, the industry needs to protect “the capability of financially vulnerable suppliers,” according to PwC.
COVID-19 slashed demand for air travel. Aircraft makers such as Boeing Co. and Airbus received order cancellations. Aircraft makers and airlines cut jobs.
“Ultimately, demand for commercial air travel (as well as cargo freight) will recover, but it’s still uncertain what that recovery may look like, and how long it may take,” PwC said. “Indeed, the pandemic may exert permanent changes on the global commercial aviation industry.”
The comments were part of an annual report ranking countries by how attractive they are to aerospace companies.
The United States was ranked No. 1.
“The country’s dominance is supported by a large and productive labor force and relatively favorable tax environment” following corporate tax cuts enacted in 2017, PwC said.
The U.S. ranking was further strengthened by growth in revenue passenger miles from international and domestic travel in 2019” before the onset of COVID-19. The industry also was bolstered by increased defense spending, PwC said.
Singapore received the No. 2 ranking. “Singapore is Asia’s leading solution provider for aircraft maintenance, repair and overhaul (MRO) needs,” PwC said. Companies such as GE Aviation and Rolls-Royce have committed to investments in Singapore.
PwC ranked Canada at No. 3. “Canada’s aerospace and defense industry has tripled its global market share in the last two decades, making it the fifth largest aerospace producer in the world,” the consulting firm said.
South Korea and Japan rounded out the top five of the rankings. PwC evaluated countries by various criteria, including cost, labor, economy, and tax policy.
PwC also ranked individual states in the U.S. The top five were Georgia, Ohio, Washington, Texas, and North Carolina.