Industry Focus: Global Aerospace Production Soars To New Heights

By Shana Daley
From the July/August 2014 issue

According to Deloitte’s 2014 Global Aerospace and Defense Outlook, the commercial aerospace sector is expected to experience significant growth this year, driven by continued record-setting production levels at assembly facilities and throughout the aerospace supplier network. Aircraft production remains at an all-time high due to an accelerated replacement cycle as commercial carriers move to incorporate next-generation fuel-efficient aircraft into their fleets. Overall, global passenger travel also continues to increase, with most of the growth recorded in the Middle East and the Asia Pacific region.

The surge in commercial aircraft production is offsetting declines in the global defense sector. The end of the Iraq war and the impending end of the U.S. combat role in Afghanistan are resulting in fewer purchases of military equipment from defense contractors. The Deloitte study, which is the most comprehensive look at the aerospace/defense sector, projects overall growth of about five percent this year, matching the trends recorded in 2012 and 2013.

Dramatic improvements in jet-engine fuel efficiency are driving the demand for aircraft replacement. Fuel costs, as a percentage of total operating costs for airlines, have risen from an average of 13.6 percent in 2001 to an estimated 31 percent in 2013. Next-generation fuel-efficient aircraft, like Boeing’s 787 Dreamliner, promise to deliver an estimated 15 percent better fuel burn rate.


Florida has long been the world’s premier gateway to space, the undisputed commercial air traffic hub of the Americas and a major location for flight training and maintenance, repair and overhaul (MRO). The state also is home to leading manufacturers of all types of aircraft and aircraft components and one of the nation’s largest military, defense and homeland security industries. Florida hosts more than 2,000 aviation and aerospace companies and recently earned the distinction of America’s #1 state for aviation manufacturing attractiveness by PricewaterhouseCoopers (PwC).

Florida is the birthplace of the commercial aviation industry, with a 50-year legacy of space launch and exploration and a designated region for commercial space activity in the “space coast” region of Brevard County. The space coast is home to NASA’s Kennedy Space Center and offers close proximity to two of only eight licensed U.S. spaceports as well as availability of launch landing facilities with 10 to 15 launches occurring annually in Florida. The state also offers tax exemptions on commercial space activity and aircraft parts and machinery, making manufacturing in Florida a cost-effective option.

When Northrup Grumman announced in 2012 that they would be locating their Manned Aircraft Design Center of Excellence facility in Melbourne, few could have anticipated the significant impact this decision would have on Florida’s aerospace industry. Now, just two years later, the company has announced three more projects and a long-standing commitment to growing Florida’s space coast, including their largest project yet with the Aircraft Development Facility in Melbourne.

One of the most compelling reasons for Northrup Grumman’s decision to invest in Florida was the availability of aviation workforce and the large “badgeable” talent pool with which to draw from. Florida is a right-to-work state that employs 82,500 aviation and aerospace personnel including rocket scientists in addition to machinists, pilots and engineers.

With 19 commercial airports, Florida airports are some of the most frequented travel destinations in the U.S. Many commercial airlines and MRO’s in Florida have taken advantage of the commercial aviation network and access to the international marketplace. Brazilian-based Embraer, a leader in commercial aircraft design and manufacturing, recently announced the expansion of their Phenom assembly facility in Melbourne. The facility, which opened in 2011, assembles several lines of executive jets.

The company chose Florida over other Southeastern locations because of the close proximity to Melbourne International Airport and because Florida was the largest market for Embraer’s Phenom jets. Embraer has launched several other projects throughout Florida. Also located in Melbourne, Embraer’s Engineering Technology Center was designed to conduct research and development for products and technology across Embraer’s business lines. And in Jacksonville, Embraer broke ground on a new facility to build light military attack support aircraft in Jacksonville as part of a $427 million defense contract.

Embraer is just one of many aviation companies that have entered into Florida’s defense manufacturing market. Florida is home to one of the nation’s largest defense and homeland security clusters and ranks in the top 5 states in Department of Defense contract awards. Virtually every major defense contractor in the U.S. and abroad has significant operations in Florida and the state offers a vast network of major contractors and suppliers for military and government markets. With 20 major military installations, three unified combatant commands and more than 758,000 jobs created as a result of defense spending, Florida offers an impressive pool of employees with the skills and security clearance demanded by the industry. The state also provides tax refunds for qualified space and defense contractors, making Florida a competitive location for defense operations.

Global aerospace and defense giant, Lockheed Martin, chose Orlando as the location for its Mission Systems and Training facility. The new facility will provide surface, air and undersea applications on more than 460 programs for U.S. military and international customers. The project will create 200 positions that will focus on training and logistics advancements supporting the F-35, F-16 and F-15 aircraft programs.

Other traditional defense companies, such as Pratt & Whitney, have found great success in Florida as a parts manufacturer for aviation, aerospace and defense. A division of United Technologies Corp., Pratt & Whitney is a world leader in the design, manufacture and service of aircraft engines, auxiliary and ground power units and small turbojet propulsion products. The company chose to expand their West Palm Beach facility to include an Engine Center dedicated to the production of their PurePower® PW1100G-JM engine for the Airbus A320neo aircraft and the F135 engine for the F-35 Lightning II fighter jet. The expanded facility holds a great deal of significance for the company because it is the first time the company has manufactured outside of its Hartford, CT headquarters since World War II.


Many know Michigan as a global center of the auto industry and some know its leading positions in office furniture manufacturing, venture capital growth, food processing and other industries. Some might be surprised to learn of Michigan’s vital role in the nation’s aerospace and defense industries.

Today three words spell out our most pressing aerospace and defense needs: research and development. And very few places on the earth can match Michigan’s potent mix of R&D, high tech talent and demonstrated and continuous innovation.

Add to that a reinvented state government, greatly improved business climate and aggressive economic developers and you have the base for future expansions in these critical industries.

“To compete successfully for the next generation of programs within the U.S. defense industry, you need state-of-the-art technical facilities, the brightest engineering and research talent available and the support of your local and state-based economic development organizations. We have all of those advantages here,” said Peter Keating, Vice President of Communications of General Dynamics Land Systems.

Kalitta Air, based in northeast Michigan at the former Wurtsmith Air Force Base, has received a $2-million performance grant for a new $9.7-million maintenance, repair and overhaul facility for jumbo jets. (Photo: Michigan Economic Development Corporation.)

For a true sense of the state’s technology leadership, you need only to know a few of the ways that differentiate Michigan from virtually all other locations. When the renowned Boston Consulting Group recently ranked the top 50 most innovative companies, it was found that 13 of that top 50 operate significant R&D facilities in Michigan. The U.S. Patent Office in Detroit, the only one outside of the nation’s capital, came into being as a result of Michigan’s annual leadership position in intellectual property applications. On the talent front, the state is home to 70,000 research and design professionals, another 65,000 engineers and 181,000 skilled tradespeople.

Michigan’s culture of innovation can also be seen in a number of recent dramatic business climate improvements. State business taxes were reduced more than 80 percent in 2012, “bureaucracy buster” reforms eliminated more than 1,500 unneeded regulations and passage of right to work legislation are changing how business views the state. Today Michigan ranks among the top three of the nation’s 12 largest states on the Tax Foundation’s State Business Tax Climate Index as well as its Corporate Tax ranking.

The Michigan Economic Development Corporation has implemented groundbreaking new approaches to helping the state’s businesses to grow. Its Pure Michigan Business Connect links businesses with new contract opportunities with auto makers and their suppliers, to be sure, but also major aerospace and defense companies, both in the state and around the country.

Thanks to PMBC, Boeing’s Research and Technology teams have been tapping the capabilities of a number of Michigan firms, including Liberty Tool Inc. of Sterling Heights, one of 11 PMBC companies that ventured to Seattle to meet with the aerospace giant in August 2013. Liberty has since received more than 150 contracts and a Pride@Boeing award for “above and beyond the call” efforts to produce and deliver crucial Boeing 777 parts during a critical developmental shortage.

PMBC was developed by MEDC three years ago to provide Michigan companies with new growth opportunities at little or no cost through its business-to-business network, It now counts some 20,000 businesses among the network that has facilitated an estimated $1.6 billion in revenues for Michigan companies.

The Michigan Pre-Seed Fund and NextEnergy, MEDC-supported partners in technology commercialization, have fostered the growth of TM3 Systems, a developer of mobile microgrid power management systems in Royal Oak. Its products enable military deployment wherever needed.

MEDC has reinvented the state’s business attraction and retention toolkit with a variety of new approaches. Its Pure Michigan Talent Connect offers a vastly upgraded workforce service that links businesses in search of talent with people interested in finding new work. In June, it hosted the state’s largest ever job matching event at Ford Field where 120 companies met and interviewed some 2,500 pre-screened applicants. The Michigan-based companies offered 1,200 jobs in the fields of engineering, design, project management, supply chain management, finance, operations, sales, marketing and software development.

Another innovation by MEDC, upfront cash for business location support has replaced a cumbersome incentive program built on tax credits. Kalitta Air, based in northeast Michigan at the former Wurtsmith Air Force Base, was approved in February for a $2 million performance-based grant for its new $9.7 million facility. Kalitta, which offers nose-to-tail maintenance, repair and overhaul services, is constructing a new 80,000-square-foot hangar to allow its crews to work on larger aircraft like B-747-400s, D747-8s and Dreamliners. The company projects to add 200 new jobs to its existing 1,300-person Michigan workforce.

From simple beginnings in a pole barn 11 years ago, Northern Wings Repair has grown markedly in the aerospace and military manufacturing sectors. The Upper Peninsula-based Native American, veteran-owned enterprise has seen remarkable success with assistance of MEDC-supported Michigan Procurement Technical Assistance Center.


The Port of Everett is located in Snohomish County, which is at the heart of the Washington Aerospace Manufacturing Community, the world’s largest and most robust aerospace cluster.

Everett is home to the wide-body jets of the 747, 767, 777 (soon to be 777X) and 787. It is well known that Washington is the most trade dependent state in the nation and aviation-related imports and exports make up a large piece of the state’s trade pie. In 2014, aviation-related commodities made up over $43 billion of exports through Washington.

Port of Everett
The Port of Everett is the point of entry for all of the oversized parts used in Boeing’s 747, 767 and 777 aircraft. The parts are moved by barge to the Mt. Baker Terminal, where they’re transhipped to Boeing by rail. Photo:

The Port of Everett, 25 miles north of Seattle, has natural deep water access, on-dock rail with direct access to the BNSF main line and is an integral part of the aerospace logistics chain. Its specialized facilities transport aircraft parts to Paine Field, and are key players in the import and export of these goods through Washington.

Arriving from Japan, the Port of Everett receives 100 percent of the oversized aerospace parts for the 747, 767 and 777 airplanes, and serves as a backup for the 787 Dreamliner airplane parts at its seaport. After receipt of the goods, the port moves the parts by barge to its satellite facility, the Mt. Baker Terminal, where the goods are then loaded onto rail cars and taken to Boeing.

Washington State’s aerospace cluster features a diversified, integrated and global supply chain. It enjoys strong support from and close cooperation among government, industry, labor, education and community leaders. Snohomish County has a long, successful history of collaboration with these key stakeholders to support the continued growth and expansion of the state’s aerospace cluster, most recently manifested in Boeing’s decision to site 777X assembly and composite wing manufacturing at its Everett facility. The Port of Everett contributed directly to the collective success of statewide efforts to secure the 777X, including through site design, expedited permitting and preparation for facilities construction.

Snohomish County has an extensive record of well-coordinated public-private planning in growing the aerospace cluster. Much of this occurs at the facilities construction level, which in recent years has drawn new manufacturers to the county while supporting existing manufacturers and workforce training institutions in expanding their operations. Some of these manufacturers include: Goodrich Aerostructure Integration Facility; Korry Electronics/Esterline; B/E Aerospace; the Washington Aerospace Training Center; and the Dreamlifter Operations Center.

With the expansion of the aerospace opportunities in Snohomish County, available industrial properties are at a premium. The Riverside Business Park is a ready and available 34-acre master-planned land development located strategically on the Snohomish River and within minutes from I-5. With its substantial infrastructure and strategic location, Riverside Business Park is ideally suited for a number of industrial uses that will fit your business needs. The industrial park is zoned for heavy industry.

Some of its features include:

  • Five minutes to I-5
  • Four miles to the Port of Everett’s international shipping facilities
  • 15 minutes to Paine Field Airport and air cargo facilities
  • 30 minutes to downtown Seattle
  • 120 miles to Vancouver, B.C.
  • 45 minutes to Sea-Tac International Airport
  • Excellent rail service, adjacent to BNSF

The County also has comprehensive educational resources to support workforce development. Snohomish County is proactively working together with regional and statewide partner’s opportunities to create centers for research and innovation in composites and advanced materials that will support emerging and evolving industry needs. In addition, Snohomish County recently created a new full-time position to pursue new export and foreign direct investment opportunities for county businesses and communities, including related to aerospace.

The Port of Everett is an economic development enterprise carrying out the public’s trust to manage and develop resources, transportation facilities and supporting infrastructure to enable community opportunity. The Port of Everett strives to bring jobs, business and tourism to its local and surrounding communities, as well as maintain the overall environmental health of the waterfront.

The port, a major economic driver in Snohomish County supporting more than 35,000 jobs, is undertaking a major waterfront revitalization project known as Waterfront Place.

The port operates three business lines: an international seaport, industrial and commercial real estate and the largest public marina on the West Coast. The seaport specializes in high and heavy cargoes that support the aerospace, manufacturing, constructing, mining and energy industries.


Your company’s location is key to successful operations and overall growth. This is one of the most important decisions that companies make, so it’s critical to make the right decision. Topeka Regional Airport & Business Center is an ideal location for companies that are looking to expand, relocate or grow their business.

Topeka Regional is located in Topeka, KS, which is part of the most geographically-central metro in the country. Topeka, located in Shawnee County, offers a wide range of resources and services to existing and relocating and expanding companies:

  • Aggressive local incentives, based on the quality of jobs, and state incentives, including income tax credits.
  • Cost of doing business is 15 percent lower than the national average.
  • Infrastructure that allows goods shipped by truck to reach 25 percent of the U.S. in one day and 90 percent by day two.
  • A 10-year property tax exemption on real property for qualified companies.
  • Over 1,000 available acres fully equipped, including two commerce parks with prime locations near rail and highway transportation and direct access to two runways.
  • Foreign Trade Zones that are “user friendly,” site-specific and allocated on an individual company basis.

Topeka Regional Airport & Business Center has positioned itself to be an asset for companies. It secured nearly $2 million from state and federal funds to serve as a revenue guarantee. And, Topeka Regional has the support of the city. More importantly, Topeka Regional can support your company’s needs.

Topeka Regional Airport has two runways and more than 2 million square feet of apron space available for transient military, general aviation and commercial aircraft. The primary runway is 12,800 feet long, allowing any airplane in the world use of the runway. United Airlines saw the benefits available and partnered with Topeka Regional to provide commercial flights. Air traffic control is manned 16 hours of the day. The airport has a great location with prime north-south, east-west highways (I-35, I-335, U.S. Highway 75 and I-70) and rail transportation.

Topeka Airport
Topeka Regional Airport has two runways and more than 2 million square feet of apron space available for transient military, general aviation and commercial aircraft. (Photo: GO Topeka Economic Partnership.)

Topeka Regional Business Center is directly adjacent to the Topeka Regional Airport. The Business Center is home to nearly 100 satisfied tenants including Coca-Cola, AT&T, Westar Energy and Fed Ex. It is comprised of office and warehouse space ranging in size from a few hundred square feet to 90,000 square feet.

Topeka Regional not only provides the Business Center, but also has land that is ready and waiting for your company’s next facility. There are over 100 acres of available space for your company to develop what you need.

Topeka Regional Airport is supported by the 190th Air Refueling Wing. The 190th Air Refueling Wing is one of two Air National Guard units in the Kansas Air National Guard. The unit is located on Forbes Field Air National Guard Base, right here in Topeka and the unit’s mission is flying the KC-135 air refueling aircraft in support of worldwide aerial refueling. The 900+ member unit is rich in aerial history.

Topeka has a talent pool of more than 120,000 people; four universities and a technology institute are within a 70-mile radius. Kansas State has one of the best aviation programs in the country. They have more master-certified flight instructors than any other aviation program. The Washburn Institute of Technology is a nationally recognized innovator in career and technical education. With programs in Advanced Manufacturing and Computer and Networking Technology, students are trained to find ways to solve problems.