NEWTOWN, Conn. -- Manufacturers of auxiliary power unit (APU) engines are forecast to deliver 32,495 units during 2019-2028. The value of this production will exceed $18.8 billion. The forecast is up significantly from our 10-year forecast for 2018-2027 and reflects increased demand for aircraft worldwide.
Airliners and medium-size to large business jets are the two primary markets for APUs. Production of airliners - which includes both mainliners and regional jets - is forecast to increase through 2020, though deliveries of regional jets will grow much more slowly than deliveries of large commercial transports. While widebody airliners remain an important source of demand, production of APUs for just two narrowbody airliner families - the Boeing 737 and Airbus A320 - will account for almost 45 percent of the APU market overall.
Production of large and long-range business jets is forecast to increase in 2019 and beyond, driving up demand for APUs.
Production in both segments will decline in 2021-2022 due to an anticipated cyclical decline in the civil aviation market, but will return to growth in 2023.
In contrast to the civil sector, production of APUs for military aircraft will remain stable during 2019-2023, exceeding 500 units per year. After that, production will begin a slow decline due to shrinking demand for military fighters, military transports, and fixed-wing trainer aircraft. The military segment of the market accounts for only about 15 percent of demand for APUs, so sharply lower demand from military customers will have a relatively limited impact on the overall APU market.
The APU market is heavily concentrated. Just two companies - Honeywell and United Technologies through its Pratt & Whitney subsidiaries - will account for over 95 percent of production in the APU market during the forecast period. France's Safran also has a small piece of the APU market, but it may grow in the future. Safran and aircraft manufacturer Boeing are creating a new joint venture that will work on designing, building and servicing aircraft APUs. The two manufacturers received required regulatory approvals for the venture in November 2018, and the new company could expand Safran's share of the APU market should Boeing launch a new middle-of-the- market aircraft program in the near term. It could also produce a replacement for the APUs that currently equip the 737 MAX family, giving it a hefty chunk of the narrowbody market.
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