UTC Aerospace Systems was created four years ago when UTC acquired Goodrich Aerospace and merged it with Hamilton Sundstrand. As Goodrich and Hamilton had also grown with acquisitions, the company has an extensive portfolio of technologies, enabling it to provide 26 different systems on the Boeing 787. The range and reach at UTC Aerospace Systems is now quite remarkable.
UTAS has major subsystems involvement on a number of new-technology programs, including the Airbus A320neo, A330neo, A350 and A380, the Boeing 787, 737 MAX and 777X, Bombardier’s CSeries, Embraer’s E2 jets, COMAC’s C919, Irkut’s MC-21, and MITAC’s MRJ. This is in addition to its strong history with legacy programs.
UTAS is also strongly involved with military, helicopter, business jets, regional aircraft, and UAV programs, with applications across multiple platforms and subsystem integration roles on many. As a result, it is the largest aviation supplier, but a factor of nearly two over its nearest competitor. The company now has revenues of $14.3 billion annually and is forecast to grow at 5-6% per year for the foreseeable future.
UTAS was built through the acquisition of industry leading companies by its predecessor companies. Hamilton Standard acquired Sundstrand. Goodrich Aerospace, known for wheels and brakes, acquired Rosemount (pitot tubes) and Rohr (engine nacelles). Many of these companies trace their histories back to the inventors of their category of components that moved aviation forward.
OEMs like to talk about how every few seconds one of their aircraft take to the sky. For UTAS a component or part takes to the air every second. At any given moment, more than 2.5 million parts made by UTAS are in flight. With 90 product lines sold to 1,500 customers and installed on 70,000 aircraft, UTAS is clearly the gigantic supplier that few people have heard of, because most of its products aren’t high visibility items. But behind the scenes, UTAS products are used to power, start, ventilate, control, monitor, protect, land, and stop aircraft.
What’s the next step for a company with 90 separate products? The trends in commercial aircraft are towards more integrated, more electronic, and more intelligent systems. UTAS is at the forefront of each of those trends.
The Boeing 787 is an example of a more electric aircraft. UTAS developed the electrical system for this aircraft, and through the elimination of pneumatic bleed air from the engines, not only improves fuel efficiency but also saves weight throughout the aircraft. Today, for the next generation of commercial aircraft, UTAS is working on on-board wireless communications between components to save even more weight, and communicate added intelligence about how its components are performing and to alert operators of potential maintenance issues beforehand to avoid costly cancellations. Today, individual components communicate their status. In the future, the trend will be towards more integrated systems, with sub-systems talking with each other to optimize performance. With experience in each of these areas, UTAS is ideally positioned as a systems integrator, a role it demonstrated with the Boeing 787.
In that process, UTAS has been able to double its revenue on high-tech versus low-tech aircraft through new technologies. Whether from sensors and actuators for fly-by-wire components to new electronics, as new program enter the market and replace older models, UTAS content will continue to grow at faster than the industry growth rate in the commercial sector. But the more exciting element will be the next generation of aircraft, in which capabilities from multiple subsystems can communicate and be optimized on a total aircraft, rather than subsystems level. For that task, a company with deep experience in many of those subsystems has a natural advantage. And UTAS has 26 such sub-systems on the Boeing 787.
UTAS benefits from the boom in aerospace across their wide footprint. With about 26,000 commercial aircraft now flying, business is good. But with 46,000 aircraft expected to be flying in 2036, business is going to get a lot better. UTAS is currently on all the key platforms to one degree or another. UTAS is twice the size of any other aerospace systems vendor. Yet is not a brand that comes to mind – because almost everything it makes lives under the skin.
The company is remarkably active in technology. UTAS employs 8,000 engineers that have earned the company more than 900 patents in 2015 (2+ per day), while investing $12.5 billion in R&D over the last 5 years. The company has seen its content on commercial aircraft rise from about 2% for legacy models to 4% in the new high-tech commercial models, a major potential source of growth.
The US aerospace business generated $300 billion in economic activity in 2015 according to the Aerospace Industries Association, which is equivalent to 1.8% of the nation’s GDP or 10% of the national manufacturing output. UTAS generated $14.2Bn in sales which puts the group at about 4.7% of the $300Bn in the overall aerospace sector.
It is reasonable to assume that aerospace is going to grow faster than the rest of the economy for the next several years. Demand for new aircraft is high and should remain strong. These new aircraft will deploy the products and devices UTAS delivers, and provide an aftermarket for years afterwards. UTAS is well positioned to ride the current aerospace wave.