Swiss Aerospace Sector Update – from drones to beyond gravity

The Aerospace industry plays an important role in Switzerland’s economy. The sector is composed to a high extent of SME enterprises, producing highly innovative products for original equipment suppliers (OESs) and other large aviation customers.

Civilian – and Military Aerospace & Defence make up the two sub-divisions of the Swiss Aerospace sector.

• In 2020, the total revenues of the Swiss aerospace & defence market stood at US$13.7bn. (This represents a compound annual rate of change of -6.8% between 2016 and 2020).
• The military aircraft segment was the market’s most lucrative for the same period, with total revenues of US$5.9bn, equivalent to 43.3% of the market’s overall value.

Sector Organisation

The Swiss Aerospace Cluster (SAC) is a key organisation and platform for the Aerospace sector in Switzerland. The SAC describes itself as “the industry network supporting the Swiss aerospace and satellite services industry, in the transfer of knowledge and technology”.  

With over 170 members, the SAC, is the largest and most important aerospace organisation in Switzerland. And the priority focus of the SAC Working Groups are:

• • Production & Maintenance
  • Helicopters
  • Drones & UAS
  • Space Technologies

• The members are organised in different categories:
  • Original Equipment Manufacturers (OEMs):
    • Tier 1 – Systems and Modules
    • Tier 2 – Components
    • Tier 3 – Parts
  • Industrial Processing & Machinery
  • UAS  & Operations
  • Logistics & Infrastructure
  • Engineering, Consulting & Services
  • Insurance & Legal
  • Economic Support & Government
  • Partner Organisations
  • Research Institutions

The SAC also works closely with other international clusters (e.g. “Forum Aerospace Baden-Wuerttemberg” in Germany ) as well as national partners such as the
Switzerland Global Enterprise 

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The Switzerland Global Enterprise (S-GE) is the international trade and development organisation that supports Swiss SMEs in their international business, as well as helps innovative foreign companies to establish themselves in Switzerland.

According to the S-GE website, their team helps establish and promote new markets, market segments or customers for their members. In addition S-EG actively promotes international cooperation in projects.

With regards to the aviation sector, the mission of the S-GE is to strengthen the positioning of organisations within the aviation, space and satellite services industries, with a particular focus on SMEs. Some of the work the organisation does to achieve this:

• Build and maintain a network of manufacturers, service providers, universities of applied sciences, associations, public institutions, with a focus on supporting SMEs.
• Facilitates active exchange of information and knowledge between all partners.
• Ensures knowledge and technology transfer in the sector of aerospace and satellite services.
• Participation in international projects to assess, develop and strengthen the aerospace industry.
• Encourage and facilitate participation at leading international trade fairs

Trends & Future Prospects for the Aerospace Industry

The global aerospace market reached a value of nearly US$298.0 billion in 2020, having decreased at a compound annual growth rate (CAGR) of -0.3% since 2015. The market is however, expected to grow from US$298.0 billion in 2020 to a whopping US$430.9 billion in 2025. This would mean a growth rate of 7.7%.

In addition to short term growth – the global aerospace market is expected to continue to grow at a CAGR of 5.9% from 2025 and reach US$573.6 billion in 2030. Some of the following drivers, restraints, trends and opportunities that will facilitate this are:

• Market Drivers
  • Increased commercial use of drones. With the USA – Federal Aviation Authority‘s relaxation on restrictions for flying drones expected to be followed by other countries.
  • Manufacture of more robust drones designed more for commercial use – where Switzerland is a leading player.

• Market Restraints
  • One of the major restraints coming off the back of COVID travel restrictions are the rising bankruptcy cases among budget airlines, which are expected to hinder the growth of the aerospace market.
  • Since Summer 2018, no less than eight European airlines operating on low profit margins have ceased operations owing to “fluctuating fuel costs, over-capacity, and a continent-wide fare war”.

• Market Trends
  • The use of so called “Smart Materials” such as graphene and carbon nanotubes help to make airplane wings more efficient and help reduce weight and fuel consumption.
  • These materials make the wings lighter, thus increasing efficiency, compared with those of conventional design, whether made from metal or composites.
  • One example of working with smart materials is with Switzerland’s national airline – Swiss, which is set to be the the world’s first passenger airline to take advantage of the new AeroSHARK aircraft skin technology to further reduce carbon dioxide emissions and fuel consumption in flight operations.
  • Aerospace manufacturing companies are starting to use virtual reality (VR) technologies to improve manufacturing efficiency. VR technology is being deployed in areas such as training, maintenance, design and manufacturing.

• Opportunities
  • The commercial aircraft market segment, will offer the best opportunities, as these are forecast to achieve  global annual sales up to US$102.6 billion by 2023.
    • The top opportunities by type, will be in the passenger aircrafts market segment. These will include:
      • Aircraft maintenance, repair and overhauling services (MRO) market which will arise in the commercial aircrafts in the MRO services market segment.
      • The top opportunities in the aerospace support and auxiliary equipment market segmented by type will be in the satellites market segment, which will increase revenues annually by 2023 of up to US$3.6 billion.
      • The top opportunities in the aerospace market segmented by size will be in the narrow-body segment, which is forecast to grow sales globally to US$106.3 billion by 2023.
      • The top opportunities in the aerospace market segmented by end-user will be in the private sector segment, which will achieve global sales annually of  US$124.4 billion  by 2023.
      • Finally, the top opportunities in the aerospace market segmented by operation will arise in the manual segment, which will achieve US$120.1 billion in global annual sales by 2023.

Job Opportunities

Types of engagement have become much more hybrid since Covid, and along with full and part time employment, remote and contractor roles for special projects are now widely advertised. But in addition to hiring workers or contractors for a special fixed time projects (e.g. for a new client order), some companies are also hiring contractors for a given time period with a view to taking them on permanently if they prove to be a good fit for the company (more about this is an upcoming blog!).

The types of jobs being advertised in the Swiss aerospace industry are extremely diverse and the number of roles open is growing as technology advances and the recovery from the pandemic continues. These can be found in disciplines such as engineering , supply chain, aerodynamics, project management and IT to name just a few.

As the world continues to recover from Covid and new geo political challenges bring new risks, the recovery and growth of the aerospace sector, are far from guaranteed. But the good news is – there is a new optimism being driven by new technologies, new components and perhaps a new order for the aerospace sector too. Industry forecasts are bullish but only time will tell if these are accurate.

Accurity GmbH is a professional employer organisation based in ZRH. We are SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including Aerospace SMEs. Contact our team on sales@accurity.ch to see how we can help your company.

Michael Boaden

Michael is a celebrated strategic Marketing and Business development expert with decades of experience and achievements under his belt. He has extensive commercial knowledge in the relocation and travel industry and has specialised in highly individual customer facing services.
As a Swiss national Michael has a broad experience of Switzerland.