Avionics market trends up

AEA tracks sales in actual sales totals (not manufacturer list prices) reported by member firms. Data reported November 10 came from 22 companies (the number can fluctuate over time) that produce and sell general aviation aircraft electronics. The $1.7 billion bottom-line total reported for the first nine months of 2021 represents both a 5.4-percent uptick from the same period in the prior year, and a 1.8-percent increase in third-quarter total sales compared to the second quarter of this year.

This clear trend toward a year-over-year increase by the time the books are closed on 2021 is certainly better than a steady state, or, worse yet, a decline, but it hardly fills the hole punched in the avionics market—along with the broader economy—when the coronavirus pandemic brought air travel to a grinding halt. Avionics sales for 2020 were down 26 percent from 2019, the steepest single-year tumble since AEA began publishing quarterly and annual sales.

There are encouraging signs in recent pilot hiring trends, and a general return to travel for business and leisure bodes well, but in the broader economy, supply has emerged as a limiting factor while demand has surged. That very much includes the supply of semiconductors used to make everything from power tools and kitchen appliances to cars and personal computers. The degree that ongoing semiconductor (microchip) shortages impact manufacturing and sales varies widely by industry, and some companies have more inventory on hand than others, so the overall effect on the avionics market remains unclear. Some financial industry analysts and investors expect semiconductor supply to remain disrupted well into 2023.

AEA President and CEO Mike Adamson was less exuberant about the quarterly and year-over-year upticks than he otherwise might have been:

“We are encouraged that this report indicates industry sales are continuing an upward trend despite the lingering pandemic and changing market forces,” Adamson said in a news release. “Although industry has seen robust sales during some unprecedented times, there are still challenges with the supply chain and workforce to work through as we close out the year and look ahead to 2022.”