Aero Engine Market Demand Analysis

Aeroengine refers to an engine that provides aircraft with the power required for flight. Aeroengine is the heart of the aircraft. It directly affects the performance, reliability and economy of the aircraft and is the core component of the aircraft.
Establishing a strong aviation industry is an inevitable choice for establishing the status of a big country. Since 2006, China has successively issued policy plans to assist the development of the aviation industry. The national strategy has defined the medium and long-term priorities for the development of aviation industry. The strategic position of the aviation industry has been established. As the core of the aviation industry and the largest short board aero-engine industry will use the aviation industry's east wind to usher in its rapid development of the Chaoyang period.
At the end of 2017, China's first large passenger aircraft engine validation machine CJ1000AX completed the assembly. This is the first time that China's largest aero engine has appeared. It is also a major breakthrough for China in the aviation field, indicating that China can manufacture large engines for passenger aircraft.
The CJ-1000AX is also known as the Yangtze River 1000, which is a model exclusively for domestic C919 passenger aircraft. The civil engine in the true sense was first disclosed in 2011. After several years of efforts, it has achieved initial results and the assembly has been completed. It will start testing and will replace the imported engine on the C919 passenger aircraft as one of the alternative models.
Chart 1: Partial Parameters of CJ-1000AX Engine (Unit: Meter, Level)

Although the future of China’s aircraft engines has the support of national policies, the internal economic needs will also affect the research and development direction and development speed of the aero-engine industry. Therefore, the analysis of the demand for engines in different aviation fields will contribute to the healthy and rapid development of the aero-engine industry in China.
Business Aviation Development Stable
Commercial aviation is an aviation activity that conducts commercial passenger and cargo transportation by aircraft. Its business performance indicates that this is a commercial activity and it is aimed at profitability. Therefore, the first consideration in the field of commercial aviation is definitely how to reduce costs and increase profits. The primary consideration in selecting an aeroengine is its economics, such as fuel consumption, maintenance, and maintenance. Whether it is convenient, how long life, and so on.
With the development of economy and the progress of society, people's spending power has become stronger and stronger. Aircraft, such as transportation, have become more and more popular, and people's requirements for comfort have become higher and higher. When choosing an aeroengine, airlines must also consider the issue of comfort, such as the noise of the aeroengine and the stability of the flight.
From January to November 2017, the total turnover of the entire industry was 98.66 billion ton kilometers, an increase of 12.4%, of which passenger turnover was 868.67 billion person-kilometers, an increase of 13.3% year-on-year; cargo and mail turnover was 22.05 billion tons, an increase of 9.6% year-on-year.

Source: Forward-looking Industry Research Institute
From the point of view of commercial aviation transportation turnover in recent years, the demand for commercial aviation engines in China will increase in the future.
In the next 10 years, China is expected to purchase 2,640 commercial aircraft, including 150 regional airliners, 1,800 single-aisle aircraft, 600 double-aisle aircraft, and 90 ultra-large-scale aircraft. These aircraft will need about 6,660 engines, and engine sales demand will increase. To reach 482 billion yuan, maintenance demand will reach 321 billion yuan.
Exhibit 3: Estimated Aerospace Engine Demand for Commercial Aviation in the Next 10 Years (Units: Taiwan, Taiwan, 100 Million)

Source: Forward-looking Industry Research Institute
General aviation demand grows faster
The scope of application of the general aviation field aircraft includes air patrol, air rescue, small-scale special freight, resource survey, agriculture and forestry protection, pilot training, company commuting, private business, leisure tourism and other aspects. Therefore, different general aviation aircraft need to be able to adapt to different mission requirements, so for aero engines used in general aviation aircraft, it is necessary to develop suitable aero engines for different functional aircraft.

Source: Forward-looking Industry Research Institute
Highest performance requirements for military aircraft engines
Since the military aeroengine is a manifestation of the military strength of a country, the performance of military aeroengines is superior to that of civil aeroengines. The most advanced military aeroengines in the world cannot be sold. Research and development of military aeroengines must be conducted independently without foreign assistance. . Military engines require performance first. In order to pursue performance at all costs, they must be able to tolerate harsh environments. Economic requirements such as maintenance, cost, and longevity are relatively minor, while commercial engines are more economically demanding.
Only the United States, Britain, Russia, France, and China, the only countries in the world that can produce their own military jet engines, have fallen behind these four countries. The United States has a comprehensive lead and the United Kingdom is also competitive. Russia’s military aeroengines do not lag behind in terms of performance and thrust, but there is a big gap between the US and UK in terms of lifespan and overhaul time, but Russia’s products are complete and can produce various types of engines. This is stronger than in the United Kingdom. France's Snecma is relatively small, but it can also produce qualified turbofan military engines that can be equipped with 3rd-generation fighters. China's military engine customers are mainly the People's Liberation Army. In addition, they may carry out small-scale exports to friendly countries that are difficult to influence their production. In the next 10 years, the Chinese military aircraft may need more than 6,000 engines.
Exhibit 5: Estimation of Military Aircraft and Corresponding Aero Engine Demand in China for the Next 10 Years (Units: Taiwan, Taiwan, Ten Thousand Yuan, RMB 100 million)