GE Capital has released a national survey of C-suite executives at middle market companies (ranging from $10 million - <$1 billion in sales). The survey, which is broken out by industry including those in commercial aviation, examines opinions on financial performance, operational issues and the economic outlook.
KEY FINDINGS - The most significant insights to emerge from GE Capital’s survey of leaders of U.S. middle market firms include:
- Commercial aviation firms in the middle market have experienced revenue and employment growth in the past year.
- Financing needs in the coming year will focus on working capital and equipment.
- Most middle market commercial aviation firms generate the majority of their revenue from propeller or narrow body platforms.
- There is an expectation in the industry that large commercial aircraft deliveries will decline and business jet deliveries will increase sometime after 2016.
THE COMMERCIAL AVIATION INDUSTRY
- Average revenue of commercial aviation firms surveyed = $123,510,000
- $10MM-$49.99MM: 66%
- $50MM-$99.99MM: 15%
- $100MM-$499.99MM: 10%
- $500MM-$999.99MM: 9%
- Average number of employees = 1,475
- Full time salary: 64%
- Full time hourly: 19%
- Contract: 11%
- Part time: 6%
The majority of middle market commercial aviation firms are privately held; 23% are partnerships.
- Privately held: 55%
- Partnership: 23%
- Sole proprietorship: 11%
- Public company:6%
- Other: 5%
ECONOMIC STRENGTH
The majority of commercial aviation firms are confident in the global, U.S., and local economies.
| Sentiment |
Global Economy |
U.S. Economy |
Local Economy |
| Extremely/very confident |
25% |
18% |
25% |
| Somewhat confident |
51% |
62% |
53% |
| Somewhat negative |
21% |
5% |
13% |
| Negative |
3% |
15% |
9% |
Three-fourths of commercial aviation firms indicate that their firms saw improved performance vis–à–vis one year ago.
- Improved overall performance: 73%
- Improved financial performance: 78%
- Increased employment: 55%
TOP BUSINESS CHALLENGES
Commercial aviation firms are faced with declining commercial aircraft deliveries, making it difficult to grow revenue. Fewer than half expect industry expansion in the coming year.
Top three concerns:
- Ability to continue to grow revenue
- The cost of doing business
- The cost of healthcare
INDUSTRY-SPECIFIC QUESTIONS
- 39% of commercial aviation firms generate the majority of their revenue from propeller platforms. One-quarter generate the majority of revenue from narrow body planes
- A majority of business leaders in the commercial aviation industry believe large commercial aircraft deliveries will begin to decline in 2017 or beyond
- Business jet deliveries are expected to increase after 2016
- Over one-quarter of commercial aviation firms currently selling assemblies or finished goods have already incorporated additively manufactured parts into their production process, and more than half plan to incorporate them within a year
STATE OF INDUSTRY AND PIPELINE
Just under half (44%) of commercial aviation firms will add workers. Employment in the sector is expected to grown an average 3.7% year over year.
- Same: 51%
- Improved: 44%
- Down: 5%
- Mean total growth: 3.7%
Just under half of middle market leaders in commercial aviation expect industry expansion in the coming year. Additional financing will focus on the need for working capital and equipment needs.
- 47% believe the sector will expand in the year ahead
- Capital expenditures are expected to be greater in 2014 for 44% of commercial aviation firms
- 36% of firms in the commercial aviation sector will be considering additional financing for working capital and one-third will consider financing for equipment
Margin growth is expected to be 2.7% in the commercial aviation sector in the coming year.
Same: 47%
Increase: 43%
Decline: 9%
Mean total growth: 2.7%
ABOUT THE SURVEY
GE Capital surveyed 27 companies in the commercial aviation industry to ascertain their views on the global and U.S. economies and their outlook on a variety of important economic, industry and business-level issues, including growth expectations and financing needs. The responses here represent averages based on 27 responses. The decision-makers who were surveyed represent middle-market companies with revenue ranging from $10 million to $1 billion.
For more information and to view the full survey results, visit For more information on commercial aviation, visit www.gecapital.com/aviationsuppliers.
The full GE Capital U.S. CXO Industry Economic Outlook Survey covers the following industries:
- Commercial aerospace
- Food & beverage
- Construction/contractors
- Construction dealers
- Fleet
- Healthcare services & healthcare products
- Retail
- Telecom & media
- Trucking
For information on these additional industries, visit gecapital.com/cxosurvey.
ABOUT GE CAPITAL, AMERICAS
GE Capital, Americas is a leading provider of loans and leases to mid-market businesses in the U.S., Canada and Mexico. We make it easier for companies to purchase or lease equipment; manage vehicle fleets, acquire businesses, and otherwise grow and thrive in the changing marketplace because we understand the industries we finance. As part of GE, we also deliver more than money. Our customers benefit from direct access to more than 100 years of successful innovation and resources from GE to help them become smarter, faster and more efficient. Visit www.gecapital.com/americas.
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