As the number of aircraft in service continues to grow, and with it the demand for airfield infrastructure, aerospace companies are looking for ways to leverage economies of scale through macro economic factors. For example, if they can reduce their total capital investment through a single acquisition or improve their profit margin on a single product, then that will have a positive impact on their overall macro economic rating.
In other words, it could mean that the company's market share will rise, which will have a positive effect on its credit rating. It may also mean that the company's financial health will improve. Such improvements would translate into greater profits and a stronger rating, leading to even stronger demand and pressure on the value of the financial instruments used to determine aerospace company ratings.
These macroeconomic factors are not unique to aerospace companies, however. Every other industry is constantly looking at its overall business situation, looking for opportunities to reduce costs, increase revenues, and/or improve market share. In this sense, there is no need to be an aerospace company to take advantage of the macro economic factors of today.
One of the primary reasons why many aerospace companies fail is because they are over-leveraged financially. While this might seem like an odd thing to focus on, it's true. Because of the growing number of aircraft in operation, many small companies (and even some large ones) must raise a large amount of capital in order to compete.
If you are a small aerospace company that has been working on an airframe or engine, you are going to need to raise a significant amount of capital to get your operation started. Because many aerospace companies have a much higher risk profile than large corporations, they are not able to obtain capital in the same way.
However, that doesn't mean you don't have access to the types of things that are required to support your airfield infrastructure. Instead, the key here is to use the resources available to leverage these resources. For example, the smaller firms might be able to obtain additional funding through acquisitions or licensing arrangements.
Alternatively, there are also a number of private investors that are more than willing to finance the companies. Of course, these investors may not be in the best interest of the larger companies. However, in the past few years, with the economy as poor as it is, these private equity firms have become extremely important to the success or failure of aerospace companies.
One of the most powerful arguments for investors using this approach when considering investment opportunities for aerospace companies is the fact that they can have more control over the direction of their investments. This means that they can take a more active role in how their money is invested.
In fact, while it is true that many aerospace companies have suffered from a recent downturn, most are doing quite well. That doesn't mean that they will remain on top, but it does mean that it is possible for you to enjoy better results.