The Defense and Aviation Industry sector also got its share from the damage caused by the Corona virus, which spread from all over the world, starting from China. Production, supply, fairs and agreements were interrupted due to the virus that killed thousands of people.
The shocks on the supply side are perhaps the most visible effects of the outbreak's impact on the defense sector. Companies that are dependent on the supply chains in countries affected by the virus or in the affected countries are victims of the virus. In Europe, now known as the center of the virus, serious problems have been experienced. Shipbuilding companies such as Fincantieri in Italy and Navantia in Spain decided to stop many projects. Many defense companies in Europe will experience imbalances in production queues and deliveries due to projects that have decided to stop partially or completely.
Large Defense Companies
Corona virus, which deeply affected the whole world, also hit the stocks of defense industry giants. The stocks of companies such as Lockheed Martin and Leonardo experienced serious decreases. The shares of some defense companies are trading at the lowest prices in the last five years. This is an alarming situation. Even though it has not yet affected the secondary markets, its indirect results can pose serious problems. Companies planning to issue shares to finance their investments will have to postpone these thoughts in the current pernicious picture. Another worrying situation for companies is; some organizations may purchase cheap shares, causing some companies to lose control or take over. Defense companies can take back their stocks to avoid such incidents. However, this will cause the company to pay more and maybe lose liquidity when it is needed.
Corona Effect in Turkey
When the Defense and Aviation Industry sector is examined by looking at the export figures in the first quarter of 2020, it seems that its volume has decreased compared to the previous year. When the virus started to spread in our country in March, the negative effect of Corona becomes clear.
Turkey Exporters Assembly data when viewed from the Aerospace and Defense Industry sector, as in the first quarter of 2019 614.718 $ Million was realized that these figures, in the first quarter of 2020 482.676 $ Million 'to have declined. If we need to make a comparison between the first quarter of 2020 and 2019, it is observed that there is a decrease of -21.5%. Looking only at the data of March; The export volume of March, which was $ 2019 million in 282.563, has decreased to $ 2020 million in 141.817. This shows that the March exchange rate between the two years has almost halved with a figure of -49,8%.