Spain - Aerospace and DefenseSpain - Aerospace and Defense
Overview
| USD (Millions) | 2016 | 2017 | 2018 (estimated) | 2019 (estimated) |
| Total Market Size | 8,355 | 8,677 | 9,156 | 9,661 |
| Local Production | 10,728 | 11,180 | 11,797 | 12,448 |
| Imports | 3,811 | 4,022 | 4,244 | 4,478 |
| Exports | 6,184 | 6,525 | 6,885 | 7,265 |
| Exchange Rate - Euro 1: USD: 1.00 | 1.1069 | 1.1297 | 1.1810 | 1.1400 |
Data Sources: Unofficial estimates based on information from sector sources, including
TEDAE (Spanish Association for Defense, Aeronautics and Space) and Cámara Oficial de Comercio, Industria, Servicios y Navegación de España.
U.S import figures include aeronautics only. Data for 2018 available in July 2019. A for 2018 available in July 2019. Lower USD estimates reflect the large change in dollar/euro exchange rate.
Spain has a highly advanced aerospace industry that offers excellent opportunities for foreign companies. Sales reached an estimated USD 11.18 billion in 2017 and the sector employs more than 56,404 workers. It is characterized by rapid growth in recent years and significant investment in R&D, up to 10.5 percent of turnover in aeronautics and 11 percent in defense. These companies have consistently dedicated more than 10 percent of their turnover to R&D activities over the last ten years. The volume of business grew by 10.2 percent when compared to the previous year.
Spain’s aerospace industry is currently ranked 5th in Europe in terms of turnover and 8th in the world. Activity is concentrated in:
- Madrid (49.4 percent of total sales)
- Andalusia (21.7 percent)
- Castilla La Mancha (12 percent)
- Basque Country (9.9 percent)
- Catalonia (1.4 percent)
Source: ICEX (Spanish Trade & Investment Institute)
Spain, as one of the leading five European players in civil and military aeronautics, actively participates in the main European aeronautic initiatives. Over the last decade, Spain’s participation in civil aviation and military aircraft programs has increased significantly, so much so that its workforce has increased by 65 percent since 2000.
The Spanish space industry is primarily involved in contracts of high value added in the areas of qualification of flight and ground equipment and the development and operation of satellite systems. There are also several space centers located in Spain, the most important ones being the European Space Astronomy Center (Madrid), the Madrid Deep Space Communication Complex (NASA) and Boeing’s European Center for Research and Technology located in Madrid. Boeing’s European Center for Research and Technology areas of action include Air Space Management, Safety, Unmanned Aerial Systems (UAS), Security and Sustainable Environment.
Leading Sub-Sectors
Key Areas of Activity for Spanish Aerospace Companies:
| Aeronautics Sales by Segment | |
| Aerostructures and Systems | 79 percent |
| Equipment | 11 percent |
| Motors | 10 percent |
Space Sales by Segment | |
| Flight Segment | 43 percent |
| Operators | 33 percent |
| Ground Segment | 18 percent |
| Launch Equipment | 6 percent |
Source: TEDAE
Spanish aeronautics covers the entire value chain of an aircraft which makes it well positioned in the global context. The established aeronautics companies in Spain stand out in several fields, including military transport and special mission aircraft, low pressure turbines, maintenance, repair and operation activities, air-refueling aircraft and air traffic management. Spain also has a highly specialized industry in aero-engines and propulsion engineering technology, with experience in advanced manufacturing processes.
In recent years, there has been ongoing interest within the industry in products related to composite tape-laying machines and fiber placement systems with computerized numerical control. Other products in demand include components for aeronautical software programming, avionics, ground support equipment, and extruded metal products and plastics.
According to the Spanish Chamber of Commerce, aeronautics imports from the U.S. have grown steadily since 2010, after declining in previous years. It is estimated that in 2018, U.S. civilian aircraft, equipment, parts and engines imports will continue to grow. U.S. aeronautics products and services are well regarded in terms of price and quality, so U.S. exporters typically have good business opportunities in Spain. The best prospects for U.S. firms in this market continue to be those associated with the manufacturing of new aircraft or engine models, or in highly technical products such as composites.
The Spanish space sector has seen a change of priorities from those traditionally linked to launches and scientific developments. The emphasis is currently on satellite uses that meet the needs of not only telecommunications, but also institutions, governments and civilians. TEDAE estimates that total sales of the Spanish space sector in 2018 will be EUR 1 billion (USD1.2 billion).
Opportunities
Spain's aerospace sector continues to grow and shows great potential due to increased competition in the Spanish air transport market and demand for new technology. Spain’s emphasis on the development of new airport infrastructures should further contribute to this trend.
In response to the current and previous administrations’ calls for Spain to increase NATO spending, the Ministry of Defense has succeeded in securing a dramatically increased budget plan for the coming years. In December of 2017, the Spanish Minister of Defense communicated to NATO´s Secretary General Spain´s commitment to increase its military spending to 1.53 percent of GDP by 2024, which would amount to an increase of EUR 10 billion (USD11.8 billion) per year. The Minister also recently pledged to invest EUR 10.8 billion (USD 12.8 billion) to cover the "most necessary and urgent needs" of the Armed Forces. Advocacy cases where CS Spain is involved will help reach agreements essential to the success of large U.S. companies, in securing part of this new business and will ensure continued bilateral defense between Spain and the U.S. Through assisting these U.S. firms with their expansion into the Spanish markets, the companies’ revenues and connections are expected to grow, supporting the jobs of some of their tens of thousands of employees.
During the recent economic crisis, companies continued to request airline licenses for landing rights from civil aviation authorities. This increased the total number of airplanes operating in Spain and created a steady expansion of the spare-parts market. This market should be further bolstered in the coming years by increased regional air traffic.
To decrease operating costs, some airlines have leased equipment or even aircrafts, creating opportunities for U.S. companies. This strategy has been in use by the aviation industry for a number of years and, with additional tax incentives added in 2013, this service market is expected to continue in the short term. However, U.S. aircraft manufacturers face tough competition from Airbus as well as from other aircraft manufacturers based in Europe.
Market opportunities are expected to remain due to the need to replace less fuel-efficient aircraft with eco-efficient jets as well as the growth in domestic and international air travel demand. Lightweight aircraft constructed using new materials and composites can improve fuel efficiency. Much of the current effort of airplane producers and their component suppliers to reduce fuel consumption and emissions is concentrated in the area of these lightweight materials. Environmentally-friendly aircraft also involve innovative technology in the area of power and fuel management, “smart wings”, cockpit advances and independent energy sources for equipment.
While Spanish aerospace companies do seek outside suppliers, becoming a supplier can require patience, financial effort, an innovative approach and competitive pricing. A direct presence in Spain could strongly support this process. The best entry strategy into the Spanish aerospace market is to enter into a partnership with an existing local company, since the Spanish company can act as a representative and provide insight into local markets.
Spain has a presence at several important aerospace trade events:
- The Aerospace and Defense Meetings in Sevilla is the most important B2B event in Spain for the aerospace sector. The event provides a platform where leaders in the aerospace industry can meet with potential industry partners. The event includes conferences and workshops covering topics such as OEM procurement and supply chain policies for the aerospace and defense sectors. The event is designed to help large firms and SMEs involved in global aviation and space industries to explore specific markets and seize business opportunities with civil and defense applications. The next edition will be held June 16 – 18, 2020.
- At the European level, the International Paris Airshow is the largest and longest-running aerospace trade show in the world. The event is considered one of the most important aerospace meeting places. It is held every two years and the 53rd edition will be held at Le Bourget Exhibition Center from June 17-23, 2019.
- Another important aerospace event is the bi-annual Farnborough International Airshow, held in Farnborough, United Kingdom. The stated objective of the event is to provide first-class business opportunities for the global aerospace industry. The next edition will be held July 16-22, 2020.
- FEINDEF. The first ever defense trade show in Spain took place on May 29-31, 2019 and was a huge success. The next edition will take place in May 2021.
Some of the trade shows above are U.S. Department of Commerce certified trade events and include a global chat component.
Web Resources
Cámaras (Cámara Oficial de Comercio, Industria, Servicios y Navegación de España)
Foreign Trade Statistics/ Chamber of Commerce
Spanish Association of Defense, Aeronautics, and Space Techological Companies (Asociación Española de Empresas Tecnológicas de Defensa, Aeronáutica y Espacio)
United States Census Bureau
U.S. Commercial Service Spain:
Aerospace & Defense Specialist: Carlos Perezminguez
Tel: +34 91 308 1598
e-mail: Carlos.Perezminguez@trade.gov