Germany’s aerospace and aviation industry stands on the cusp of a new age - with autonomous commercial aircraft and electric flying ushering in a major paradigm shift on the way to climate-neutral flight.
Germany is one of the world’s leading aviation and aerospace nations. Every aircraft in the world contains technology made in Germany. One in six passenger aircraft assembled worldwide – equivalent to around 17 percent of global aircraft production – comes from the country. World-class research networks and a highly integrated supply chain provides a platform for the development of the aircraft of the future. The pace of innovation in the sector is faster than ever before, with autonomous flight and electric aviation making major advances in the past year.
Germany hosts leading players from all business segments – from equipment manufacturers, material and component suppliers to engine producers and whole system integrators. The high concentration of aerospace-related manufacturing and assembly - as well as R&D, design, recycling and supply - facilities enables companies to successfully partner across the whole value chain. This environment offers numerous business opportunities across multiple technology segments for international investors.
Germany’s Aerospace Industry in Numbers
EUR 39 billion turnover in 2022
One of Germany’s most innovative industry sectors – seven percent (EUR 3 bn) of annual revenue were spent on R&D in 2022
More than 100,000 industry employees, +5,000 new jobs created in 2022
200+ companies and related institutions
Export rate: 73 percent or three quarter of value added
From smart manufacturing (“INDUSTRIE 4.0”) to the airline planning cycle revolution and the dawn of in-flight connectivity – the digital revolution is having a significant effect on the aerospace industry. IT solutions will penetrate all aspects of airline production and operation (including maintenance and engineering, ground, and in-flight operations).
Real-time data enables quick reaction times to operational environment changes like weather conditions and airport traffic congestion. At the same time, ground operations can be accelerated, thereby increasing airplane utilization times. Growing passenger dependence on personal electronic devices may even allow airlines to replace costly and heavy in-flight entertainment systems with streamed content. Potential areas of application are numerous and provide an opportunity to further improve production, operational and maintenance efficiency, customer satisfaction, and safety.
Supply Chain Transformation
Notwithstanding the fact that OEMs are also considering suppliers from other world regions, their traditional role as vertically integrated players is changing. In addition to their customer interface role, OEMs are increasingly focusing their attention on their function as system architects and integrators.
Ongoing technological specialization leads to the outsourcing of systems - such as avionic electronics - and the design and production of aircraft structures. The increased importance of system and module suppliers means that OEMs require major suppliers to enter into risk-sharing partnerships with suppliers who are prepared to undertake technological and commercial risks. Globalization and outsourcing developments are also visible further upstream on the value chain.
Hybrid Electric Flight
In 2020, electric aircraft set new distance records, replicated short commercial flight paths and attracted investment from the major airlines.
Hybrid electric aircraft have the potential to transform mobility thanks to drastically reduced aircraft emissions and noise pollution levels. In the mid-2000s, aviation generated more than two percent of global carbon dioxide emissions. With the number of air passengers forecast to double by 2035, hybrid electric flight offers the industry a way forward towards climate-neutral aviation.
New modes of air mobility
Electric engines also make completely new aircraft configurations possible – allowing fuel consumption and emission levels to be reduced further still. This new clean and quiet mode of transport could also pave the way to new modes of mobility including, for example, airborne shuttle services directly from city centers to the nearest large airport in the not-so-distant future.
Decarbonized, or climate-neutral, flight is the declared goal by 2035, with the industry seeking to bring the world’s first climate-neutral commercial aircraft to market. These technologies will enable climate-neutral flight on all distances up until 2050 - all of which are already or will be developed and produced in Germany.
The aviation research program supports the goals formulated in the European agreed “Flightpath 2050” document. This program will be continued and funding for hybrid-electric flying will be ramped up. In the region of EUR 25 million has been budgeted for hydrogen technologies in the aeronautics research program for the period 2020 to 2024:
Build overall system capability in the new technology area of hybrid-electric flying through, among other things, disruptive propulsion concepts (e.g., fuel cell, H2 engine/generator, and compact and reliable hybrid-electric propulsion architecture based on hydrogen fuel cells) and sustainable ground power (multifunctional fuel cell).
Flight-test hydrogen-powered and hybrid-electric technologies (combination of hydrogen/fuel cell/battery technologies) in the regional aircraft sector and preparation of these technologies for use in the commercial widebody sector.
Germany’s Commercial and Private Drones Market
In 2020, the global passenger drone industry attracted almost USD 1 billion investment – half of which found its way to German companies.
There are currently around 430,000 drones in use in Germany. The very high proportion of drones in private use (385,500) is no longer increasing, with the private drone market seemingly saturated. However, the commercial sector is catching up significantly: The share of drones in commercial use has increased by 138 percent since 2019 to a current level of 45,200 drones – more than doubling within two years.
The trend is set to continue: While only one in nine drones is currently being operated commercially in Germany, this will be one in three by 2025. Over the same period, the German drone market will grow from its current level of EUR 840 million to more than EUR 1.6 billion.
Today, nearly 400 drone economy companies already employ 14,000 people – in areas including surveying, inspections, filming, and photography – representing an increase of almost 40 percent within two years.
There’s lots of business to be done in Germany with unmanned aerial vehicles - or "drones"as they are more commonly known. The German market, the fourth largest in the world, is expanding exponentially.
Experts predict that the German market for UAVs will grow from its current EUR 574 million to nearly EUR 3 billion by 2030, as new uses for drones arise on a nearly daily basis. Opportunities abound in everything from vehicle construction to mission planning and infrastructure.
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A high export rate of 80 percent for higher value unmanned aircraft systems (UAS) above EUR 10,000 speaks for the strong technological position of German suppliers in this still relatively small market segment. This also applies to investment in software, flight control and evaluation solutions that can also generate additional added value – both in the high-priced UAS market and the broader UAS application spectrum.
German Drone Market Segmentation
The German drone market is highly diversified with manufacturers and service providers in present in all sectors. Companies entering the German market will meet highly professionalized value chain conditions.
UAS segment creating opportunities for application industries
The market for drones, unmanned aircraft systems (UAS) and applications have been discovered. Specialization areas include software development, the legacy aviation industry and the ICT sector.
Unmanned aircraft systems require innovative solutions including electric drives in combination with lightweight and sustainable energy supply concepts. New sensor technologies (visual, thermal, ultrasound, radar, lidar) are required for the development of autonomously operating UAS to ensure safe air navigation. This in turn is creating demand for digital UAS traffic management systems to manage UAS airspace traffic.
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Urban and Regional Air Mobility
Urban air vehicle concepts are attracting international investment, with “flying car” projects across Germany raising significant capital investment as well.
Technological advances allow for new urban mobility
Vertical take-off and landing aircraft can fly from high buildings and fit efficiently into existing transport infrastructure. The technological advances made in electric aviation, reduced maintenance levels and the short distances covered in urban transportation (typically between 30 km and 50 km) make new routes – currently covered by car and train – both possible and profitable. Ambulance services as well as the medical supply delivery of blood and organs are but two examples of time-critical services that will also almost certainly be dealt with by air.
Model regions for urban air mobility
As one of the largest civil aviation locations, Hamburg has realized the potential of urban air mobility at an early stage. The Hanseatic city has been a Model Region for Urban Air Mobility since 2018. Hamburg is one of the first cities in Europe to tap into the civil use of drone and other urban air aviation technologies.
Hamburg offers optimal urban air mobility conditions thanks to its dense urban environment and large number of aviation companies and operators driving drone technology development. Ingolstadt, along with 14 other European municipalities – including Hamburg – has also been part of the EU-supported "Urban Air Mobility Initiative" since 2018.
New Space Travel
There are currently 125 start-ups in Germany active in the aviation industry and aerospace sector according to Berlin-based new space research and consultancy firm Capital Momentum.
Start-ups rocking Germany’s new space aviation industry
Conducting an analysis of 92 of these companies, Capital Momentum found that 65 of these start-ups generated around EUR 900 million turnover – equivalent to around 30 percent of the German space industry.
Half of the 92 start-ups analyzed belong to the upstream sector of companies that produce small rockets, satellites and components as well as engineering services and software for space missions. Thirty-eight percent of start-ups provide downstream services including satellite data analysis.
Germany’s new space hotspots
The country’s new space hotspots are to be found in the greater Munich area (32 companies), Berlin (15 companies) and Rhine-Main region (13 companies). The new space industry is increasingly interconnected with other industries: 76 percent of start-ups surveyed have clients in the agriculture, logistics, oil, and pharmaceuticals sectors.
Aviation in Germany News Feed
The aviation, or aerospace, industry in Germany has a very long tradition that has born internationally operating industry giants. Despite this long heritage Germany as a location for aerospace industry is constantly renewing itself. Find out latest developments here.
The German Aerospace Industries Association (BDLI) represents the interests of the German Aerospace Industry. Communication with political institutions and authorities is one of the major tasks of the BDLI, as well as providing a variety of services in Germany and abroad for its members.
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