Feature Article


Keeping a Pulse on the Market by Joseph E. Fritz, Investment Casting Institute


ball, and quite frankly, no one saw the pandemic, nor its effects, coming. As a result, I feel it appropriate that we take a few minutes to look at how the January forecast has been impacted, and what we are hearing about recovery.


A


Aerospace Civil aviation has suffered a tremendous blow as frequent travelers and vacationers have spent most of their time in compliance with Shelter in Place orders.


The International Air


The International Civil Aviation Organization reports that international air passenger traffic is down 44%, with a worst case scenario of 80% by year end. The World Trade Organization reports that global merchandise trade volume is off by 13%, and if the trend continues, this metric can be down as much as 32% going into 2021. As far as when recovery will occur, experts offer conflicting views ranging from one to four years. Further complicating this is that


the world has been forced into a virtual environment, and many of us have


16 ❘ June 2020 ®


Transport Association reports that global Revenue Passenger Kilometers are down 48%.


s I had once noted in our January Market forecast issue of INCAST Magazine, I don’t have a crystal


been successful at conducting “face to face” business from our homes via any number of virtual platforms with success. Prior forecasts for Revenue Passenger Miles (or Kilometers) in future years may not be achieved even at full recovery as the world, and the way we conduct business, has changed. So the question is “How does this


translate into casting sales?” Since no one really knows when recovery will take place, a long range forecast cannot be addressed with any degree of accuracy. As a result, I am limiting my reassessment of the Aerospace Industry to the short term outlook.


Aerospace - Civil Aviation With the decline in travel, the world’s major airlines are cutting back, which is clearly evidenced in the headlines: • “American Airlines to Cut 30% Of Management, Support Staff”


• “LATAM Airlines Files For Bankruptcy”


• “British Airways Furloughs Most Employees”


• “Air France Brings Forward A380 Retirements”


• “Air Canada To Furlough Half Of Workforce In June”


• “With No State Aid Forthcoming, Avianca Files For Bankruptcy”


• “Lufthansa Confirms It Needs State Aid To Survive”


This of course ripples down through


airframe to engine manufacturers and onto our foundries: • “April Becomes Worst Month Ever For Boeing—So Far”


• “Airbus Cuts Commercial Aircraft Production By One Third”


• “Embraer Commercial Eyes Corporate Realignment, Shelves Turboprop”


For most of the past decade, engine manufacturers were accelerating production to keep pace with unprecedented airliner delivery rates. We now find the engine makers slowing production.


Prior to the COVID-19 pandemic,


GE Aviation was already expecting a leaner 2020 due to delays to the GE9X- powered Boeing 777-9 and slow-downs to the GE90-115/GEnx-1, powered 777-200LR/300ER and 787 programs. The company is now faced with further 2020 production declines of 40-50%. GE Aviation and Safran’s CFM joint


venture is expected to see the greatest change. Production output from the


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