The past 24 months have been among the most miserable ever for many parts of the aerospace industry. Will 2004 see the long-awaited upturn? We examine prospects in each sector

The recovery from the 2000-02 downturn will be well under way in 2004, but this will not mean an immediate boost for commercial aircraft manufacturers. As in the last few years, the world's aerospace manufacturers will be depending on a few high-value military programmes to provide near-term growth, although the launch of the 7E7, Boeing's first airliner programme in over a decade, will be good news for the project's foreign partners, for hopeful suppliers, and for the embattled manufacturer.

After a weak 2002 and only sluggish growth in 2003, the Organisation for Economic Co-operation and Development, which includes 30 leading industrial democracies, predicts "sustained growth in the USA and progressive recovery in Europe and Japan" for the next two years. This is expected to translate into sharp increases in airline traffic (see Airlines), but it will be some time before this traffic growth leads in turn to significant rises in airliner orders (see Manufacturers). The continued low level of deliveries will in turn mean another hard year for suppliers.

Commercial manufacturers' morale, if not their balance sheets, will be boosted in 2004 by the launch of the 7E7. Backed by Boeing's new chief executive Harry Stonecipher, the 7E7 launch will boost the prospects of project partners Alenia and Vought, and will be followed by a spate of subcontracting opportunities. Short-term they will be in research and development into composite aerostructures - the 7E7 airframe will be more than 50% carbon laminate and carbon sandwich composites by weight, the first predominantly composite airliner since the days when "composite airframe" meant plywood. Health and usage monitoring systems on the 7E7 will present more opportunities for avionics and sensor suppliers.

Missile defence

On the military side, the Iraq war has been fought and won, but the occupation and reconstruction are proving slower, costlier and bloodier than many hoped. Although ballistic missile defence is a nominal objective of the US government - Northrop Grumman recently won the contract for a boost-phase interceptor missile - attention is also on the lower-technology goal of defending airliners and military helicopters against light surface-to-air missiles.

While there is little that can divert or deflect an unguided rocket-propelled grenade away from a low-flying helicopter, the attack on a DHL Airbus A300B4 over Baghdad in November will increase pressure for affordable and reliable missile countermeasures. This, rather than any increase in aircraft or weapon procurement, will be the lasting effect of the Iraq conflict in 2004.

The seemingly unstoppable Cold War legacy projects will continue, but all could face hurdles in 2004. The Eurofighter Typhoon could be in severe trouble if, as expected, budget constraints and the demands of modern warfare lead the UK government to cut its 232-aircraft order by a third. Tranche 2, which includes air-to-ground capability, will be safe, but the UK's cancellation of Tranche 3 will cast doubt on the project's future, and on its export potential. The US defence department is due to decide in November 2004 whether to move to full-scale production of the Lockheed Martin/BoeingF/A-22 Raptor. Much like Typhoon, Raptor has at best limited ground attack abilities, and is expensive. Each one costs an estimated $200 million.

But November 2004 will be no time to expect normal behaviour anywhere in the USA. The result of the presidential election could produce radical shifts in trade policy. The political effects of cancelling a major fighter programme will be brought into focus in the run up to the 2 November ballot: cancellation or cuts would not play well with the electorate, but may be unavoidable once the election is out of the way.

Source: Flight International