Annual Report 2010 in PDF - BBA Aviation

Commercial Aviation
Our commercial aviation business is focused on providing ground support services including refuelling,
baggage handling and technical services to commercial airlines around the globe. Our primary growth
driver in this market is commercial aviation movements.
2010 proved to be a year of rapid recovery for the world’s airlines after sufering a decline in passenger
volumes in 2009 and consequent decline in revenues and continued operating losses. Passenger numbers
increased throughout 2010 but commercial aircraft movements in the USA for the year as a whole
remained fat as careful management by airlines caused yields to improve dramatically. For 2011 we expect
to see modest growth in movements in both the USA and Europe, and somewhat stronger growth in the
Asia Pacifc region. Market forecasters predict a global growth rate of 2.8% p.a. in commercial aviation
movements for the 2010-29 period with the highest growth rates in the Asia Pacifc region.
We continue to see favourable outsourcing trends as commercial airlines, particularly in the more mature
markets, increasingly regard services such as ground handling and into plane refuelling as non-core.
Military Aviation
In the military market our business is focused primarily on the aftermarket support of legacy military platforms.
While delivering fat to slight increases in spending for 2010, US and European defence budgets are under
considerable downward pressure as governments look to reduce defcits. The US Secretary of Defense has
proposed major cuts over a fve year period and similar proposals are expected in the UK and elsewhere
in the EU. We expect to see the majority of these cuts focused on the procurement of new platforms and
an improved platform efciency. This is likely to lead to the extension of service lives of selected legacy
platforms and to the outsourcing of support and supply chain services. This is likely to be positive for our
business as we continue to support the extended lives of the in-service feet and as the OEM warranty
support for the ageing feet expires.
Directors’ Report — 13