As the German aerospace industry gears up for the ILA trade show in Berlin in early June, the country’s aerospace and aviation manufacturers are taking an optimistic tone, even though the challenges of the global coronavirus crisis are not yet fully in the rear-view mirror.

Supply chain problems persist, and the crunch for qualified professionals is a constant concern. As the drive for sustainable aviation technologies remains in high gear, many companies see even more opportunity for the kind of innovation that has allowed Germany to establish itself as an economic leader in the first place.

But amid the guarded positivity, a mild post-Covid-19 hangover remains. Inflation continues to be a nuisance, and clients’ unique wishes when it comes to detailing their products add complexity.

A320 Finkenwerde

Source: Action Press/Shutterstock

Germany is at the centre of a flourishing European aerospace industry

Civil aviation in Germany has always played second fiddle to a world-class automotive industry, but in recent years – and particularly supported by production ramp-ups at the major players in the field – the sector has gained traction.

According to the German Aerospace Industries Association, or BDLI, in 2022 (the latest year for which complete statistics are available), aviation and aerospace employed 105,000 workers, of which 73,000 worked in the civil sector. It generated €28 billion ($29.8 billion) in revenue. About two-thirds of the sector’s value creation is for export, the trade association says.

According to Stefan Berndes, the BDLI’s head of air transport, equipment and materials, Covid-19 is a memory, but one that remains somewhat painful.

“Everything is on a very good path, the production figures, both among narrowbodies and in the long-range sector, are rising, and the entire industry is growing along with it,” he says. “The challenge at the moment is to get the skilled workers and to organise the ramp-up, that is, to get the parts of the appropriate quality in the correct time frame.”

The BDLI is hoping for a banner turnout at the biennial ILA show in Berlin, which traces its roots to 1909 and claims to be the oldest aviation show in the world. It is the first ILA since all pandemic-related travel and production restrictions were lifted, and organisers say at least 600 exhibitors from 30 countries will attend.


Germany, in the centre of Europe, is also at the centre of a flourishing and burgeoning European aerospace industry – an enviable position.

“[Aviation] is one of the few areas where there is an integrated European industry – the whole life cycle from the beginning of development, research, technology, right through to construction and operation – it is basically set up in a European manner, and not in silos next to each other, like in the automobile industry,” Berndes says.

“All of this is happening in a global growth market, in a position at the top of the world. That’s why it’s important for me to emphasise how valuable it is [for Germany] to maintain this position.”

That said, labour issues have been afflicting German industrial firms of all stripes since the coronavirus pandemic abated. Many European governments implemented sector-specific financial aid so that companies were able to manage through the downturn without widespread layoffs or substantial bankruptcies. So while some expertise was lost, much remained.

Michael Schreyoegg, chief programme officer at MTU Aero Engines, says the company “worked hard to retain our experienced and expert workforce throughout the pandemic, because they are not only the heart and the brain of MTU but also our future”.

“In light of developments across the industry since then, this has proven to have been a wise move,” Schreyoegg adds.

MTU workers

Source: MTU Aero Engines

Companies such as MTU still experience ‘knock-on effects’ in their supply chains

During the pandemic, German firms made use of labour market mechanisms such as short-time work programmes – a temporary reduction in working hours due to a lack of orders – that other countries such as the USA did not have.

That allowed companies to keep experts on staff, even as the Covid-19 pandemic brought aviation to its knees for the best part of two years.

In addition, the industry’s “sexiness” has helped it thrive. Aviation is not for everyone, but for those who are passionate about flying machines and the technologies that drive them, Germany presents a myriad opportunities.

“The companies offer secure jobs, long-term prospects and often family-friendly conditions, and the number of female managers and executives is increasing meaningfully,” says Berndes. However, he adds, demographic change is already making itself felt.

“We are lucky in that aviation is a fascinating industry and our products extremely high-tech, as this continues to attract talent,” adds Schreyeogg. MTU increased its employment to over 12,000 at the end of 2023, up from 10,500 in 2021.

“Nonetheless, as with many others in Germany, we are experiencing a squeeze, particularly in areas that are in high demand, such as for IT specialists and engineers. It will remain an item to watch in coming years,” he adds.

Diehl Aviation, for one, is looking abroad for help in roles where it cannot recruit the specialists it needs to grow. The maker of cabin interiors and supply systems is building a plant in Mexico, from which it hopes to deliver by the end of 2025.

“We want to be more international,” says the company’s chief executive, Joerg Schuler. It chose Mexico to be closer to its three major OEM customers in the Americas – Embraer to the south, and Airbus and Boeing to the north.

“The access to talent also plays a role. We can build up engineering and production teams, and get skills and competencies there that are more difficult to come by in Europe,” he adds.

Currently about 80% of Diehl’s 5,000 employees are in Germany.

In recent years, the firm has had some success in attracting production specialists from automotive companies. But with behemoth Airbus also out on a hiring spree, smaller companies are finding it more difficult to find engineering and software talent, as well as specialists for complex hardware, especially in the area of avionics, he says.

“Airbus is quickly ramping up its production rates, and of course Airbus is hiring massively,” he says. “That’s when we realise aviation is not that big of an industry. Everyone has to scramble for employees in order to keep up with the production rates of the OEMs. That internal competition is the larger problem.”

One of Germany’s largest MRO shops, Lufthansa Technik, is also looking outside the country for growth and skilled workers. It is planning investments worth €1.2 billion ($1.28 billion) in the next four years, including a new component repair factory in southwestern Europe, expected to go online in 2027.


It is also trawling for potential acquisition targets in the Americas and Asia-Pacific, as organic growth will not be enough to fulfil its ambitious earnings goals.

The backbone of Germany’s economy, however, the so-called “Mittelstand” – the small- and medium-sized businesses that employ the vast majority of German workers – is having even more difficulty finding the specialists they need in order to thrive and grow.

“As a small company we can’t offer the benefits that a large corporation can,” says Eric Spieker, team leader of structural engineering at FTI Engineering Network, a company with about 50 employees based outside of Berlin. It makes video-based and sensor security systems that are installed both inside and outside aircraft.

“A big company will offer a package with all sorts of things, like fitness club membership, and people accept that the work is probably less varied. You look at the colleague two buildings over, and you ask, ‘What do they do?’

“In a small company, we offer a wide palette of work and more opportunities, and you can figure out faster if something is fun and interesting to you or not.”

Maximilian Rommel, managing director of RS Flight Systems, a 15-person avionics specialist south of Munich that works in support, implementation and follow-up of flight testing and flight data acquisition, agrees.

“The lack of subject-matter specialists – that affects us all,” he says. “It leads to higher salaries, the applicants can pick and choose, and that makes it difficult for us. Finding the employees will be the key success factor and biggest challenge for the next years. Those who can will be successful, those who can’t, won’t.”

And it is not just the human specialists that are missing. Supply chain woes affecting parts and materials are hitting across the board. The Mittelstand is able to mitigate some of the effects by being creative, while larger companies have graver issues.

“Mittelstand companies are very resilient, we have the advantage that we are somewhat more flexible and agile than the larger companies, and that has helped us through crises,” Rommel says. Also, the nature of aviation construction and maintenance allows more supply chain flexibility, than, for example, when building cars, Spieker adds.

“In the automobile industry you have a production line and when the parts are missing, the production stops. In aviation, that’s less the case.” He says FTI has had to broaden its supplier portfolio, in order to be able to access parts when they are needed.

At larger companies, the supply chain continues to create headaches that can be complex to solve, and these are not likely to abate until at least the end of this year.

Schreyoegg says MTU “still experiences knock-on effects” on its supply chain.

“MTU follows a dual or multiple source policy for our OEM production, as such, we have been able to mitigate a number of bottlenecks and deliver on our commitments to OEMs and customers – both throughout the pandemic and since then,” he says.

“In our MRO segment we have invested in used material, increased our lease-engine pool and utilised our repair network to mitigate the impact of late or lacking [new] replacement parts for customers.”

“The topic is quite massive and a daily struggle,” Schuler adds. “During Covid everyone stepped on the brakes. The warehouses were full, then afterward inventories were reduced, then there were transportation and energy issues, then inflation, then the Ukraine crisis, the Middle East conflict, and we are noticing that the supply chains are still not stable.”

As a result, Diehl has built up parts buffers to “plug the holes”.


For OEMs and their airline clients, customisation is the name of the game, and that is where it gets tricky for suppliers like Diehl. “We have small volumes and many, many different parts,” says Schuler. “We fulfill every customer’s wishes.”

Each programme has its own specifications and requirements, he says. Citing the example of an onboard lavatory, he notes that less than 20% of parts on the Airbus A320, A330 and A380 models are the same.

“That really affects the supply issue. As long as Airbus offers its customers four, five, six, seven different options for lavatory garbage bins, we will deliver the parts. But really, at the end of the day it doesn’t matter if it’s one design or seven different designs. All we want to do is throw the wet paper towel into it.”

“Unfortunately there’s not that much we can do about the supply chain situation,” adds Lufthansa Technik’s Stark. “Of course we have tried to build up buffers, but you can only increase material stock if material is available on the market.”

With global civil air transport squarely focused on sustainability – having committed to a net-zero greenhouse gas target by the middle of this century – German companies see increasing potential in getting a slice of that pie.

The BDLI is advocating for the country as “a global hub for climate-neutral flying”.

“With its key competencies and as a partner in a strong research and science network, Germany has excellent conditions to be at the forefront of the technologies and innovations required,” the organisation says.

Diehl is working on numerous projects that are focused on reducing aircraft weight – a key component in cutting fuel burn – as well as measures to improve the passenger experience and simplify crew operations.

“Today a cabin is 100% landfill,” Schuler says. “So there’s a lot to be done with new materials. And today the cabin is the highest energy consumer, so we can be more efficient there, too.”

The company has begun testing a grey water system that recycles the water used for hand washing in lavatory areas, potentially reducing an aircraft’s take-off weight by at least 250kg (551lb).

The global focus on – and race to produce – sustainable aviation fuels (SAF) will open vastly more opportunities for the country’s aerospace specialists, adds Schreyoegg. Proponents include Deutsche Aircraft, which is developing its D328eco twin-turboprop to run on 100% SAF.


Source: Deutsche Aircraft

Deutsche Aircraft’s D328eco twin-turboprop will run on 100% SAF

“There is great potential in Germany for us to develop machinery, plants and facility infrastructure for the production of SAF that could be exported to support global production,” Schreyoegg says. But companies cannot do that alone.

“We believe that both the German government and the European Union need to establish more ambitious plans for the establishment of pilot facilities and growth of infrastructure,” he says.


And with Airbus’s 8,500-strong aircraft backlog, that creates promise for the smaller firms that not only feed into its assembly lines, but also into the German aerospace ecosystem in general.

“Digitalisation, efficiency increases, but also amenities for the end-user – be they a pilot, a flight school or maintenance personnel – are important,” Rommel says. “So anywhere you can create innovation – there is a market for it.”

But funding could pose a problem, as Europeans tend to have a lower risk appetite than investors in other regions.

“What concerns me is that in the USA one approaches the issue by throwing large sums of money at it, and here some great companies are worried about getting the funds to take the next steps,” Berndes says.

“Here in Europe we are very good at innovation but not so good in commercialisation,” notes Volocopter chief executive Dirk Hoke.

“We must be smarter about keeping these companies in Europe,” he adds.

That does not mean, though, that Germany’s (in)famous bureaucracy will make an exception for pioneering aerospace ideas.

A recent law, with the captivatingly complicated German name of “Lieferkettensorgfaltspflichtengesetz”, or “The Act on Corporate Due Diligence Obligations in Supply Chains”, has complicated life for some of those firms looking to bring fresh ideas to market. It requires companies of a certain size to conduct human rights and environmental audits of their supply chains. In March, the EU added its own supply chain law.

“It means more bureaucracy, especially for small and medium-sized companies, and it is causing massive problems for our companies’ growth opportunities,” says Berndes.

That bureaucracy has already trickled down to the smaller end of the Mittelstand, says Rommel. “Our customers have requirements that they pass on to us as their suppliers.”

ILA 2022

Source: Messe Berlin

Berlin’s biennial ILA event claims to be the oldest aviation show in the world

Despite these headwinds, ahead of their 5-9 June gathering in Berlin, German aerospace industry stakeholders are buoyant for its continued development and success. At 2024’s ILA, start-ups will enjoy a special focus, the BDLI notes.

And as for ILA itself, its immediate future is also secure – a recent framework agreement signed by the local governments of Berlin and Brandenburg has ensured Europe’s longest-running aerospace trade show will continue through at least 2030.