Frost: New Aircraft Spur N. American Ground-based Flight Simulation Solutions Market
December 1, 2006 // Published as a news service by IHS
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Even as rising fuel costs and turbulent airline profits decreased demand for ground-based flight simulation solutions, analysts said the entry of very light jets (VLJs) and wide and narrow-body aircraft, such as Boeing 787 and Airbus 380, will regenerate opportunities for comprehensive, integrated flight simulators and simulation solutions for airlines and operators.
According to Frost & Sullivan, more than 70 current orders of the Boeing 787 Dreamliner for Air Canada, Continental Airlines and Northwest Airlines and 20 orders of Airbus 380 freighters for air cargo services FedEx and United Parcel Service (UPS) will significantly add to the market's growth potential.
The introduction of approximately 2,000 VLJs into the commercial aviation market during the forecast period is likely to open another new aircraft segment for flight simulation training solutions (FSTSs) providers.
New analysis from Frost & Sullivan of the North American commercial and military ground-based flight simulation markets found that revenues totaled $2.01B in 2005, with estimates to reach $2.78B in 2012.
Analysts said commercial pilots rely on ground-based flight simulation solutions to train for passenger safety and familiarity with the continuous advancements in aircraft technologies.
Considering this, the advent of new aircraft will require innovative simulation solutions addressing technological changes in avionics, flight characteristics and handling. The enormousness of the Airbus 380 alone will challenge the skills of experienced and less-experienced pilots, as well as bolster the need for flight simulation and training.
"The future of North American commercial ground-based flight simulation lies in the introduction of new wide and narrow-body aircraft such as the Boeing 787 and Airbus 380," said Frost & Sullivan research analyst Garrick Ngai.
"Notably, simulator manufacturers are starting to pursue the VLJ and wide and narrow-body aircraft segments which are expected to grow significantly over the next six years."
Notwithstanding these market drivers, issues such as the overcapacity and oversaturation of full flight simulators (FFS), as well as airline financial difficulties are likely to continue to hinder the growth of the North American commercial and military ground-based flight simulation market.
Analysts said in light of continuing difficulties, airlines have little money to invest in any new $11M FFS or other FSTSs. High simulator costs, in conjunction with the highest simulator concentration worldwide, have made it difficult for manufacturers to sell in North America.
"Despite present challenges, especially financial, North American commercial pilots and airframes are quickly aging and therefore creating a significant impetus to acquire new simulators toward the end of the decade," said Ngai. "For the ground-based flight simulation market, fostering close aircraft original equipment manufacturer (OEM), supplier and airline relationships is an effective method of offering integrated simulation solutions to clients."
In addition, market diversification and business development strategies are critical to market growth. Analysts said simulator manufacturers must diversify beyond specialized niches and leverage new segments, such as VLJs, in order to capture all possible revenue in an otherwise mature North American market.
Source: Frost & Sullivan.