- One-fifth of the surveyed companies (19.6%) had to close operations facilities during the period of extraordinary measures
- One-fourth (26%) mention wage cuts and layoffs
- More than one-third (34.8%) of the companies see the situation as an opportunity
- The Ministry of Industry and Trade is preparing an aid programme to support the aerospace industry in autumn
Existential uncertainty, a decline in demand and the shift of work to the digital environment are the main conclusions of a survey conducted among companies in the aerospace industry by CzechInvest in May and June 2020. The aim of the survey was to determine how the coronavirus pandemic has affected the leading domestic companies in this sector. Forty-six respondents from the ranks of small, medium-sized and large companies participated in the survey. The largest number of responses were obtained from companies specialising in the manufacture of aircraft and aircraft components and operating in the area of engineering and the space industry.
Restriction of production and existential problems
The majority of surveyed companies (80.4%) experienced a decline in demand, which most frequently occurred in connection with the extraordinary measures implemented in March (50%) and April (28%). Restriction of production and development activities affected more than half (63%) of the companies. Thirteen of the companies surveyed (28%) reported that they had to reduce their operations by half, while five companies saw a 70% reduction in comparison with their output prior to the outbreak of the coronavirus pandemic.
A quarter of survey respondents (24%) mentioned existential problems. The decline in demand, and thus in income, affected small, medium-sized and large enterprises. One-fifth (19.6%) of employers stated that they had to close their operations facilities during the period of extraordinary measures. One-fourth of the companies (26%) even laid off employees. At some of those companies, the layoffs involved small numbers of people, while others trimmed up to half of their workforce. Twelve companies (26%) reported wage cuts.
“The survey showed that the coronavirus crisis affected practically all of the companies surveyed. Most of them expect to return to normalcy, half of them by roughly the end of the year. However, a less positive figure is the quarter of companies that are fighting for survival. If we look at the size of the aerospace industry in the Czech Republic, that is not a negligible number,” says Michal Janečka, aerospace specialist at CzechInvest and author of the survey.
New support to restart the aerospace industry
The nature of the crisis also forced most of the companies to transition into to the digital environment. Home office and the use of digital online tools were mentioned by the majority of respondents (80.4%). Where possible, they used online meetings to handle their regular agendas. The survey shows that only three companies (6.5%) did not take this step. In addition to digitalisation, the change in work habits also posed new challenges in the form of demands placed on automation and the introduction of innovations and new technologies. More than one-third (34.8%) of the companies surveyed perceive the situation as an opportunity; during the crisis, 10% of the companies even refocused production or services on new activities, such as production of protective equipment.
In addition to financial support and the necessity of obtaining new orders, companies most frequently call for greater support for research and development. Furthermore, the Czech Republic is one of the few countries in the world that can completely develop and assemble an aircraft on its own territory, which puts it in a relatively unique position. Therefore, businesses, the state and specialists are currently addressing the issue of how to support the domestic aerospace industry. The Ministry of Industry and Trade is preparing an aid programme specifically to support the sector, which should be made available to companies in autumn.
More information and the full version of the survey are available in the attached document and here.
CzechInvest plays a key role in the area of comprehensive support for business and investments. The agency’s unique combination of regional, central and international operations ensures the integrity of its services and its ability to connect global trends with the regional conditions in the Czech Republic. One of CzechInvest’s primary objectives is the transformation of the Czech Republic into an innovation leader of Europe. CzechInvest is a state contributory organisation subordinate to the Ministry of Industry and Trade of the Czech Republic. The agency was established in 1992.