The Netherlands - Civil Aerospace: An MRO driven market (Strategy, Performance and Risk Analysis)
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According to the Global Competitiveness Report 2016-17, the Netherlands ranks fourth, representing the country’s stability and global competitiveness. The country was ahead of major economies such as Sweden (sixth), the UK (seventh) and France (21st) on this parameter. Moreover, the country ranks third in terms of infrastructure in Western Europe. Its well established infrastructure, paired with government regulations, promote foreign investment and entrepreneurial activity. Moreover, the country has a business-friendly regulatory environment which is responsible for monitoring and enforcing fair competition within the market. In 2016, the country’s aviation industry accounted for US$5.4 billion revenue with 16,000 jobs. Civil aviation contributed 75% out of which 56% was contributed by MRO.
Business and leisure tourism drives number of air passengers
In the Netherlands, number of air passengers increased at 8.0% in 2016 from 34.9 million in 2015 to 37.7 million in 2016. This is forecast to grow at 3.4% CAGR from 38.5 million in 2017 to 44.0 million in 2021, primarily attributed to the increasing number of domestic and international tourists for business and leisure purposes.
Aircraft capital expenditure to increase in the forecast period
Aircraft capital expenditure increased at a growth rate of 10.9% from US$875.0 million in 2015 to US$970.0 million in 2016 and is expected to increase at 1.4% CAGR over 2017-2021 from US$1,000.0 million in 2017 to US$1,058.0 million in 2021, due to the increased procurement of single aisle aircraft and major deliveries made by Embraer.
Deliveries to increase in the forecast period
The number of deliveries increased by 33.3% from three in 2015 to four in 2016 and is expected to increase at 4.7% CAGR from five in 2017 to six in 2021, due to the increase in the number of narrow body deliveries.