Global aerospace sales showed increase in 2010, according to AIA forecast

Posted by John McHaleWASHINGTON, 15 Dec. 2010. Officials at the Aerospace Industries Association (AIA) say that global aerospace sales improved over 2009, but have still not returned to the growth of 2007. Military aircraft sales showed an improvement of 8 percent over 2009 with sales of $64.5 billion in 2010, which made up for a decrease in civil aircraft sales of 6 percent to $48.2 billion, according to the AIA's "2010 Year-End Review and Forecast.""The aerospace industry recorded $195.7 billion in orders in 2010, a 16.4 increase over 2009. This return to positive growth is a welcome change after two years of decline," said Marion C. Blakey, AIA president and chief executive officer during the AIA's Year-end Review and Forecast Luncheon in Washington at the Mayflower Hotel. "While still off from our high in 2007, this increase hopefully marks the bottoming-out of the recent decline in orders."Looking beyond 2010, there will be a small increase in commercial aircraft sales in 2011 to $50.2 billion as Boeing begins 787 Dreamliner deliveries and announced production orders come to fruition, Blakey said. "The industry is expected to recover in 2011, but that will depend on the economy, the price of jet fuel, availability in terms of aircraft financing and environmental regulations," Blakely said.The projected end-of-year backlog for 2010 is $421.5 billion, a slight improvement from the previous year, Blakey said. "While growth has flattened, the backlog remains more than double the level recorded at the end of 2004, providing the aerospace industry with a comfortable cushion" to rideout the tough economic times.Commercial aircraft growth down the road will also hinge on the U.S. government embracing and adopting NextGen -- the Federal Aviation Administration's (FAA’s) Next Generation Air Transportation System, she added. NextGen will revolutionize air travel, improve aviations safety, improve fuel efficiency, etc., Blakey said.Once the tough economic times are over, Blakey predicted that the major growth area in civil aviation will be single-aisle aircraft with Asian market representing the most revenue potential. Sales of twin aisle, long-range planes like the 777 and 787 from Boeing are likely to improve in this region as airlines launch new non-stop routes, Blakey said.Military aircraftWhile commercial aviation will see slight growth defense spending next year will likely fall over the next few years, Blakey said.However, not initially as AIA forecasts and increase to $5.8 billion in 2011.Through 2011 and 2012 the DOD budget will continue to be substantial, "which means high output through 2014," she continued. "The DOD budget represents 48 percent of federal discretionary spending," so it is a big target for an administration looking to make cuts, Blakey added."While aircraft procurement will continue to consume the largest share of DOD investment, the federal budget crisis will likely constrain adequacy of aircraft funding," Blakey continued. "Efforts to cut the defense budget and eliminate programs run the risk of creating greater economic turmoil as well as undermining national security."Blakey said she her team would like to see a defense budget that consistently each year allocates about 35 percent to procurement and research and development -- to maintain investment in innovation.Business/general aviationThe business/general aviation industry continues to suffer from the recession, Blakey said. "For the second year in a row, general aviation sales declined in 2010. The sector has endured falling demand, restrictive credit markets, and strong competition from used aircraft."While the rate of decline slowed considerably in 2010, difficulties remain, particularly" for the midsize jet market, Blakey said. "Overall business jet deliveries are not expected to improve until 2012."Space sectorSpace sector sales are likely to be relatively flat in 2011, totaling about $45.5 billion, Blakey said. "Beyond fiscal year 2011, NASA's year-to-year budget is projected to average 2.5 percent growth through fiscal year 2015."Most of the growth will come from commercial space sector investments, Blakey noted. New strategies for national security space projects such as military satellites and research and development in small satellites also will boost the market long-term.However, Blakey says she thinks the biggest growth opportunities for the U.S. space industry lies in international sales. "Developing a more diverse customer base will not only help the U.S. maintain a strong industrial base, but developing space-related business opportunities in India, South Korea, the Middle East, and elsewhere will serve to strengthen relationships with current partners."That said, U.S. imports of aerospace products have slipped in recent years, Blakey said. In 2010 exports are expected to reach more than $80.5 billion, off slightly from 2009. The drop in civil aircraft exports is mostly responsible for the decrease, but this was offset by strong military sales, she noted.The best performers in the military sector included "helicopter sales, which rose 76.0 percent, as well as a 23.4 percent increase in the exports of missiles, rockets, and parts," Blakey said.

Global aerospace sales showed increase in 2010, according to AIA forecast

Voice your opinion!

To join the conversation, and become an exclusive member of Military Aerospace, create an account today!

Latest in Commercial Aerospace

Airbus Racer helicopter tops 250 MPH in demonstration

NASA releases first integrated ranking of civil space challenges