Analysis: 300 aircraft sold last week for tens of billions of dollars; is this a down-economy?

LOS ANGELES, 31 Jan. 2012. I hear a lot about upcoming hard times in the defense and commercial aviation sectors, so imagine my surprise this past week when saw reports that the Pentagon bought 25 sophisticated combat aircraft, and commercial airlines bought 275 commercial passenger jets. That's orders for 300 advanced-technology aircraft. In one week. Worth tens of billions of dollars.

Now I know it's premature to draw long-term conclusions from this, but all of a sudden it doesn't sound like the aerospace and defense business is in all that much trouble. Hundreds of aircraft worth billions of dollars. I'm just wondering how many people that's going to keep employed, or for whom it might create new jobs.

It all started last Monday when the U.S. Air Force ordered five C-17 Globemaster III military cargo jets in a $693.4 million deal with the Boeing Co. Commercial Airplanes segment in Long Beach, Calif. The next day the U.S. Navy ordered five E-2D Advanced Hawkeye carrier-based maritime patrol and surveillance early warning aircraft from the Northrop Grumman Corp. Aerospace Systems segment in Bethpage, N.Y., in a $781.5 million deal.

Last Wednesday the dam broke altogether. Norwegian Air Shuttle ASA in Bærum, Norway -- an airline that does business under the name Norwegian -- ordered 222 advanced single-aisle passenger jets from Boeing and Airbus. The air carrier ordered 100 eco-friendly A320neo aircraft from Airbus in Toulouse, France, as well as 100 fuel-efficient 737 MAX and 22 Next-Generation 737-800 single-aisle passenger jets from Boeing Commercial Airplanes in Seattle.

The Boeing deal was worth $11.4 billion. Airbus didn't release the dollar value of its order. Airbus and Boeing are competing their A320neo -- which stands for new engine option -- and 737 MAX aircraft head-to-head for the future fuel-efficient and environmentally friendly narrow-body passenger aircraft market.

Also on Wednesday, The Navy ordered 15 Boeing F/A-18E/F Super Hornet carrier-based jet fighter-bombers under terms of a $687.5 million contract modification, and the week's airplane sales didn't stop there.

On Thursday AviancaTaca Holding Co. in Bogota, Colombia, which includes subsidiary AeroGal of Ecuador, signed a purchase agreement for 33 Airbus A320neo and 18 A320 family aircraft. That same day Etihad Airways in Abu Dhabi, United Arab Emirates, bought ordered two Airbus A330-200 commercial freighter aircraft.

Now I realize we're in the middle of a presidential election cycle, and candidates are more than willing to point out disappointing economic conditions to make their competitors look bad. The media, for its part, always looks for bad news because it sells papers and draws Web traffic. If we let the campaign rhetoric get to us, it can feel like the U.S. is going down the tubes.

Then I see news accounts like I did last week, and it makes me wonder about what I see on TV or read in the opinion pages; am I stuck in some sort of alternate reality? I'll tell you, it's enough to strengthen my skepticism about what I see in the media ...

... because last week was good, solid economic news; there's no doubting that. People are going to stay on the job, some others might be hired, and quite a few paying passengers are going to be riding on hundreds of new jetliners.

Maybe things aren't quite so bad after all.


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