COVID-19 Impact on Pharmaceutical Packaging in Chemicals and Materials Industry

COVID-19 Impact on Aircraft Seat Actuation System Market in Automotive Industry

  • Automotive
  • Jul 05, 2021

COVID-19 Impact on Aircraft Seat Actuation System Market in Automotive Industry

The COVID-19 pandemic has influenced the whole planet with its major impacts on the economy and businesses across the globe. The COVID-19 spread worldwide in unprecedented ways due to its high infectious and contagious nature and lack of availability of its vaccine. As a result, the greatest medical challenge in the 21st century is yet to be faced by physicians worldwide. Though the emergence of the virus can be traced back to Asia, many European countries along with the U.S. have been struck massively by the pandemic. The virus has spread across all regions ranging from North America, Europe, Asia-Pacific, Middle East, and Africa up to South America. The COVID-19 has been declared as a pandemic by World Health Organization (WHO) due to its increased spread across the globe. After the declaration of the pandemic, various countries announced the complete lockdown such as India, China, and other Asian countries to decrease its spread. According to the situation report of 7th June, 2021 by WHO stated 174 million cases of the corona have been reported globally and 3.7 million patients are dead due to the coronavirus. On a slightly positive note, a total of 157 million people have recovered and total of 1.9 million vaccine doses have been administered as well.

The COVID-19 pandemic has affected the aircraft seat actuation system market significantly. The persistence of COVID-19 has affected the aviation sector and hence disrupted the travelling and movement facilities which were previously available for citizens of any economy.

Actuators convert electrical signals to mechanical movements.  Seat actuation system in aircrafts enables passengers to adjust their seating position as per their comfort level. Seats are powered and adjustable between various seating positions depending upon passenger’s requirement. Aircraft seat actuation systems also allow passengers to adjust environmental conditions around their seat such as lighting and temperature, watch movies and adjust their head and foot rest.

IMPACT ON THE DEMAND AND SUPPLY OF AIRCRAFT SEAT ACTUATION SYSTEM

When the pandemic emerged, all the sectors including the aviation sector have been adversely affected due to government restrictions for travelling and movement.

The commercial aerospace industry, in particular, has been significantly disrupted, both domestically and internationally. The aviation industry has the huge growth potential to help the country’s economic growth but due to lockdown imposition, the companies’ manufacturing of aircraft parts had been adversely affected owing to less number of order received and severe financial crisis. These factors are responsible for slowing down of the production facilities permanently. During this unprecedented time, various companies are experiencing disruption in production capacities due to movement of labor to their native villages, non-travelling of passengers, and customers defer delivery of new aircraft. This has overall, reduced the demand of aircraft seat actuation system significantly. The impact of the COVID-19 crisis distanced more than 1 billion passengers in the year, 2020 as compared to the projected baseline representing a decline of around 64.6% of total global passenger traffic.

As Alexandre de Juniac, IATA’s Director General and CEO said, ‘’Last year was a catastrophe. There is no other way to describe it. What recovery there was over the Northern hemisphere summer season stalled in autumn and the situation turned dramatically worse over the year-end holiday season, as more severe travel restrictions were imposed in the face of new outbreaks and new strains of COVID-19”

Aircraft seat actuation systems provide comfortable seating for the passengers in commercial as well as private aircraft. But as the COVID-19 pandemic continues, demand for spare parts is also down because of low maintenance requirement level. While production may slow for the same reasons as in aircraft manufacturing, demand over the next two years is unlikely to be affected since few manufactures are facing severe financial crisis. Additionally, supply of aircraft pneumatic seat actuation system parts such as electronic components, position sensors, and arresting brakes have been depressed due to the ongoing pandemic.

For instance,

According to the European Aviation Safety Agency (EASA) and Federal Aviation Administration (FAA) regulations, commercial aircraft with 9G seats will no longer be permitted to operate in the next few years. The board had framed these regulations on the requirement for aircraft to have stronger seats, which must be designed to increase the survivability of passengers and flight attendants during accidents. These had also posed a challenge for airlines in terms of cost and time as many of them do not have the budget to replace seats of all older aircraft with new ones.

STRATEGIC DECISIONS BY MANUFACTURERS OF AIRCRACT SEAT ACTUATION SYSTEM

The financial condition and results of operations have been adversely affected by seat actuator manufacturing companies. This pandemic had forced the governments around the world to implement stringent measures to help control the spread of the virus. As a result, global demand for travel had declined in the year 2020 at a rapid pace and has remained depressed since then. This impact of COVID-19 had continued to evolve and the shape and speed of recovery for the commercial aerospace still many industry’s growth remains uncertain. Few challenges have been faced by manufacturers of aviation companies. Such as,

  • Partial or full closure of offices or manufacturing facilities, either voluntarily or in response to government had affected the production line.
  • Lower production capacity and labor productivity due to employee illness, loss of key personnel, inability to travel, or the implementation of government mandated or voluntary preventative measures such as reductions in operating hours.
  • Liquidity challenges including an inability to pay suppliers and vendors.

All these unfavorable situations had affected the global economic and capital market conditions of seat actuator manufacturing companies, which further forced the manufacturers to take few measures in order to reduce the impact of this volatility through diversification of markets and expansion. With this, few seat actuator manufactures had pursued business opportunities from other markets, taking advantage of its technical design expertise and manufacturing capabilities.

For instance,

Astronics Corporation had reported significant concentration of business with their two major customers; Panasonic Avionics Corporation (“Panasonic”) and The Boeing Company (“Boeing”). Sales to Panasonic accounted for 11.1% of sales in 2020, 13.0% of sales in 2019, and 14.4% of sales in 2018.  Also the company reported that the loss of Boeing or Panasonic as major customers may have significant reduction in business with either of those customers would reduce our sales and earnings. In 2020, they had a concentration of sales to Boeing and Panasonic representing approximately 9.5% and 11.1% of our sales, respectively. The loss of either of these customers or a significant reduction in business would significantly reduce the sales and overall earnings of the company.

In addition, the commercial airline industry is highly cyclical and sensitive to such things as fuel price increases, labor disputes, global economic conditions, availability of capital to fund new aircraft purchases and upgrades of existing aircraft and passenger demand, all of which have been significantly impacted by the ongoing COVID-19 pandemic. A change in any of these factors could result in a further reduction in the amount of air travel and the ability of airlines to invest in new seat actuating system in aircraft or to upgrade existing aircraft. These factors would reduce orders for new aircraft and hence, spending for cabin upgrades for which the manufacturing companies’ supplies their products, thereby reducing the overall sales of the companies.

CONCLUSION

Pandemic has taken a toll on every aspect of life, including the global economy. With the significant downfalls in many sectors, a collaborative effort of government, industry players, and consumers can win the fight against COVID-19.

The COVID-19 pandemic has changed the entire business scenario of aviation sector. The commercial airline industry has been severely affected by factors such as travelling restrictions, fuel price increases, labor disputes, global economic conditions, availability of capital to fund new aircraft purchases and upgrades of existing aircraft and passenger demand.

While most of the companies have shown resilience by innovating technologies in real time, and demonstrating the tremendous value of the manufacturing network to customers and partners around the world, by partnering & collaborating together, seat actuator manufacturers are developing technologies and capabilities either internally or through acquisition to provide innovative solutions to the aerospace, defense and other markets where their technology can be beneficial even in this unprecedented time. This would create opportunities for the companies to deploy capital growth in the business and thereby surviving & wining in the market place in these uncertain times.