As governments around the world mobilise taxpayer cash to shield local industry from the impact of recession, every sector is keen to get its share of the action. At a conference in Brussels on 16 April, representatives of Europe's aerospace industry added to the clamour.

"We do need European institutions and national governments across Europe to not only maintain but to increase the investments in our industry, and in particular to increase their level of financial support for research and development activities," said Allan Cook, president of the Aerospace and Defence Industries Association of Europe (ASD) and chief executive of Cobham.

Cook called for funding schemes to help airlines get access to the liquidity they need to purchase new aircraft, and for public authorities "to pay particular attention to the situation that we have now in our supply chains", including a loan programme for small- to medium-sized aerospace firms.

The ASD believes that support is required if industry is to "continue writing what has so far been a great success story for Europe". Similarly, the Society of British Aerospace Companies placed emphasis on the sector's successes when, on 22 April, it reacted to the UK's 2009 budget: "Today's budget did not do enough to support the manufacturing success story that is the aerospace and defence sector."

European Aeronautical Industry 1998-2007


An obvious question arises: if the industry is successful, why should the government prioritise it for support? It is a challenge the ASD has been anticipating.

In Brussels, Cook insisted that the ASD was not seeking a bailout, and was reluctant to join "the chorus of doomsayers", adding: "We are a solid, innovative industry well equipped to weather the current economic turmoil and contribute to the economic recovery of the continent."

Indeed, he went on to say that this upbeat assessment could undermine the ASD's case at a time when, as he put it, "most sectors are vying to secure the attention and support of public authorities and national governments".

And he betrayed some anxiety when discussing defence spending and national budgets: "We are concerned that as unemployment rises, as demands for government funding are pressurised, it is obviously restricted."

In this context, the ASD has identified some specific actions for which to lobby.

One is the release of €800 million ($1.05 billion) of match funding that the European Commission promised to commit to its Clean Sky environmentally friendly aircraft research programme, which after nearly three years is still struggling to get off the ground because, says Cook, the public half of the budget is frozen in Brussels bureaucracy: "The Americans don't have to go through this to see investments made in their industry."

Elsewhere, a need for increased support from European export credit agencies was specified by Airbus chief executive Tom Enders, another speaker at the ASD event. At the conference Enders praised a French government scheme to guarantee up to €5 billion in bank loans to aerospace companies: "I'm hopeful that something similar can be established by other major countries."


For all the express reluctance to prophesise doom, there was at least a whiff of it in the air in Brussels. "We see suppliers every day in distress," said Enders. "A lot of our suppliers are indeed very small companies who were financially not very well-equipped even before the crisis, so you don't need to be a prophet to predict that we will as a result of this crisis see some going out of business but probably also consolidation."

Yet a clue to how difficult it might be to attract the European Commission's attention arrived when, the week after the ASD event, the International Monetary Fund predicted that the eurozone's economy would contract 4.2% in 2009. As the dire warnings grow noisier, the aerospace and defence industry can only struggle to get its case heard.


Source: Flight International