Demand for air travel will recover in two to three years, estimated Triumph Group, a provider of aerospace services, structures, systems and support.
During the end of fiscal 2020, in response to anticipated market headwinds arising primarily from the impact of the Covid-19 pandemic, Triumph Group committed to further restructuring and cost reduction activities to align capacity with expected demand.
Thus, these plans and related activities were implemented to generate savings of approximately $ 120 million in fiscal year 2021 on a consolidated basis, primarily in personnel and other cost reductions related to human resources.
Consequently, Triumph Group achieved these savings goals for the year ended March 31, 2021.
Broadly speaking, the company offers a variety of products and services to the aerospace industry through two operating segments:
- Triumph Systems & Support, whose companies design, develop and support proprietary components, subsystems and systems; produce complex assemblies using external designs; and provide full lifecycle solutions for commercial, regional and military aircraft.
- Triumph Aerospace Structures, whose companies supply commercial, commercial, regional and military manufacturers with large metal and composite structures and produce close tolerance parts primarily for customer designs and model-based definition, including a wide range of structure capabilities. aluminum, carbide and composites.
Triumph Group has numerous competitors in the aerospace industry.
More than anything, it competes with first-tier systems integrators and the manufacturers that supply them, some of which are divisions or subsidiaries of OEMs and other large companies that manufacture aircraft components and sub-assemblies.
For example, OEM competitors, including Boeing, Airbus, Bell Helicopter, Bombardier, Cessna, General Electric, Gulfstream, Honeywell, Lockheed Martin, Northrop Grumman, Raytheon, Rolls Royce, and Sikorsky, may choose not to outsource production of systems. , subsystems, components, or aerostructures due, among other things, to a desire to vertically integrate direct workforce and general considerations, utilization of capacity at their own facilities, or a desire to retain critical or critical skills.
Consequently, traditional factors that affect competition, such as price and quality of service, may not be important determinants when OEMs decide whether to produce a part in-house or to outsource it.
Triumph Group also faces competition from non-OEM component manufacturers, including Parker, Eaton, Honeywell, Transdigm and UTC Aerospace Systems.
Future of the industry
While the long-term outlook for the aerospace industry remains positive due to fundamental drivers of air travel demand, the Triumph Group’s current expectations are that it will take two to three years for travel to return to 2019 calendar levels. and a few more years for the industry to return to the long-term growth trend, although there is no guarantee that this period will not be longer.