Sales slump of $6.6 billion expected next year but industry association shows how government could help

The US Aerospace Industries Association (AIA) is calling on the US government to boost research and development funding, increase defence procurement and relax export licensing in order to help cushion a projected industry-wide slump in sales next year of $6.6 billion.

The economic fallout from the 11 September attacks will hit the civil aircraft market hardest next year, according to the AIA review of 2001, which is projecting a 22% contraction in sales including engines and parts from $50 billion to approximately $34 billion in 2002. The number of actual aircraft delivered, which accounts for some 75% of the total civil value, is set to decline from 522 in 2002 to 375 by next year.

Sales to the US military account for roughly a third of all aerospace sales in the USA. Although defence sales are set to increase by $5.1 billion to $55 billion as the result of increased spending on aircraft and missiles, this will go only part way to offsetting the overall decline. Aerospace employment, which totalled just under 800,000 prior to September, is set to shrink by as much as 70,000 as the result of already announced lay-offs.

John Douglas, AIA president and chief executive, is looking for relief in three areas. While defence spending on research and development is already up $8 billion to fund military transformation, this has not been matched by the Federal Aviation Administration or NASA. In the meantime, in the area of civil aerospace, "Europe has pulled even with the US," notes Douglas.

AIA is also looking to the Department of Defense to increase spending further, particularly in the area of adapting civil aircraft to military roles, such as tankers, transports, medical evacuation and electronic surveillance. Various support aircraft, including the KC-135 Stratotanker, E-3AWACSradar aircraft and J-STARS ground surveillance platform will soon be replaced, probably by aircraft based on airliners such as the Boeing 767 - all three were based on the 707 airframe.

Thirdly, the AIA wants the US government to expedite export licensing in order to improve international competitiveness by increasing staff and reducing the number of clearances required.

Source: Flight International