Aerospace disruption: China's new role, new revenue streams, MRO, final assembly lines, services

The aerospace world still has aircraft output as its core function, but is having to change its business approach. As much as "disruption" is used with airlines, it also applies to aerospace suppliers, with resulting impacts on airlines.

Airbus and Boeing are giving more assembly and completion work to China, partially because they need more facilities, but also because China mandates it in order to capture value back from aircraft purchases.

Final assembly and completion represents a small proportion of the total value of an aircraft. Still, as aircraft sales become more competitive, Boeing is looking to grow revenue from services and support. Rolls-Royce already makes most of its profit not from selling engines, but from supporting them.

Many A350 operators have signed on to Rolls-Royce's TotalCare offering, according to CAPA's MRO Database.

The evolution towards services is a challenge for China, whose ARJ21 jet and emerging lessors are ramping up service delivery and support.