The aerospace supplier squeeze is a challenge faced by many aircraft manufacturing companies, with only half of them able to sustain or grow their EBIT margin in pace with top line growth. European manufacturers have struggled the most due to the high volatility of key business factors such as oil prices, economic recession, exchange rates, and financing terms, affecting airlines and client orders. The 2009 downturn triggered by these factors resulted in low EBIT margins for European companies, which only started recovering steadily from 2011 onwards. The report recommends that aerospace suppliers focus on revenue growth and EBIT growth in line with revenue growth, as well as segmenting the supply landscape into tiers to increase EBIT margins when moving upstream.
