Aircraft

Rumours of Boeing's death have been greatly exaggerated. The death of its combat aircraft business, that is. True, Northrop Grumman winning the US Navy's unmanned combat air system demonstrator contract means Boeing has no prime position on any of the ongoing next-generation programmes, but future US combat aircraft plans look murky and could change.

It is also true that Boeing's defence business is shifting towards commercial derivatives and system integration, but it has two live production lines that will keep the company in the domestic and export fighter game for several more years.

And loss of the US Navy UCAS-D programme does not mean Boeing's pioneering work on unmanned combat air vehicles is wasted. There are signs the US Air Force wants to keep the company's X-45 alive, possibly as an unmanned jamming platform, certainly to provide technology for its next-generation bomber.

How the next few years will play out are crucial for Boeing. The US Navy is sure to buy additional F/A-18E/F Super Hornets to bridge the gap until the Lockheed Martin F-35C Joint Strike Fighter is in full-rate production. And both the F-15 and F-18 still have export potential - although nothing is guaranteed.

It is possible to see Boeing producing combat aircraft to 2015, but it is a fact the company has nothing on the books to replace them. Next on the horizon is the USAF's next-generation bomber programme, and that is sure to be another hard-fought contest.

But Boeing's military aircraft business is not going to disappear overnight. Congress looks certain to keep the C-17 airlifter in production, at least until the future of Lockheed C-5 is decided. The CH-47 Chinook and AH-64 Apache are set to continue for years. And the P-8 Poseidon maritime-patrol derivative of Boeing 737 will establish a military production line in the commercial heartland of Seattle.

Three near-term issues are crucial to Boeing: resolving the US Air Force's CSAR-X combat search-and-rescue crisis in favour of its HH-47 winning the USAF's KC-X tanker competition with its KC-767 and securing the US Navy's Broad Area Maritime Surveillance programme with an unmanned Gulfstream G550.

But the US Department of Defense eventually must face the fact that the programmes it can afford are not sufficient to sustain the industrial base it needs for competition. That means difficult business decisions not just for Boeing, but for Lockheed and Northrop.