3 minute read - 31st October 2023
Aircraft order backlog hits another record-breaking high
Year-to-date global aircraft orders are the highest since 2014, with 2,188 aircraft orders placed, as the UK’s aerospace sector continues to soar in its ongoing recovery. A new report from ADS Group, the trade association for aerospace, defence, security and space organisations, highlights that orders for single-aisle aircraft continue to dominate market recovery and account for almost 80% of orders in 2023.
As aircraft orders continue to surge, global deliveries remain steady and just below 2019 trends with 860 deliveries so far this year, a 12% increase on the same period in 2022. Deliveries for single-aisle and wide-body aircraft increased by 10% and 24% respectively at the end of Q3, a positive sign for the UK’s advanced manufacturing sector, ADS added.
For the third consecutive month, the backlog of aircraft orders has hit another record-breaking high at 14,690 aircraft with 10% growth on Q3 2022. At current rates, the aircraft on back order are estimated to be worth £229bn to the UK’s aerospace sector. Year-to-date, just 144 aircraft orders have been cancelled, significantly below trends seen in the last few years as key decision makers continue to hold firm on aircraft choices.
Ahead of the Autumn Statement, set to take place on 22 November, ADS has written to the chancellor and continues to urge government to develop and implement a new industrial strategy.
Kevin Craven, chief executive of ADS Group, said: “For the UK’s thriving aerospace sector which supports 108,000 direct jobs while generating £27 billion in turnover, £10.9 billion in value add, and £18.6 billion in exports to continue to excel in a highly competitive global market ongoing support is essential. In the Autumn Statement, we hope to see measures that incentivise investment in the UK, as well as extended support for aerospace sector R&D beyond 2025, which is critical to securing continued industry investment to accelerate the development of the next generation of cleaner and more efficient aircraft technology in the UK.”
Ahead of the Autumn Statement, ADS says it has identified areas that a clearly defined industrial strategy could deliver upon while addressing key blockers to growth and maximising return on public investment. A summary of ADS recommendations to the chancellor includes calls to:
• Introduce a reformed R&D tax credit scheme over a longer timeframe, ensuring it addresses capital expenditure and maintains support for SMEs
• Encourage investment in the UK’s defence industrial base through long-term clarity on future defence spending
• Provide long-term uplifted funding for aerospace R&D through the Aerospace Technology Institute (ATI)
• Involve the industry in developing the future revenue certainty scheme for Sustainable Aviation Fuel (SAF), ensuring the fair allocation of financial risk and amendments to related obligations to cover engine testing
• Prioritise the deployment of functional space programmes and an augmented UK technical capability to deliver upon the 2021 National Space Strategy (NSS)
• Address the challenges with access to finance for the UK defence industry, including for SMEs requiring basic banking services and primes seeking investment
• Introduce a long-term capital offering for the sector through a new Aerospace and Defence Strategic Supply Chain Fund
• Bolster the availability of electricity grid connections and support the sector to decarbonise manufacturing processes
• Provide added flexibility in the Apprenticeship Levy, both on timescales and funds
• Strengthen resourcing for key operational agencies including the Export Control Joint Unit (ECJU) and UK Security Vetting (UKSV)
• Bring forward a scheme to support exporting SMEs to attend international trade events