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26000 NEW AIRCRAFT UNTIL 2005

In its recent study, the market researchers of the US American Teal Group confirm the growth prognoses of the large aircraft manufacturers. 25830 aircraft, worth 625,9 billion dollars, until the year 2005 is the result of the Teal Group´s analysis, which was published in the scope of the Farnborough Air Show.

For the coming nine years the market research institute expects the production of approximately

• 5622 new airliners with a turnover potential of 343,7 billion dollars,
• 2917 fighter aircraft, worth 108,1 billion dollars,
• 7647 helicopters (41,1 billion dollars),
• 4331 business aircraft (39,3 billion dollars),
• 2939 regional aircraft (27,4 billion dollars),
• 130 special mission aircraft (20,3 billion dollars), and
• 1589 trainer and light attack aircraft.

For the end of the forecast period, chief analyst, Richard Aboulafia, expects the USA to produce aircraft worth 36,2 billion dollars per year (Europe: 22,4 billion dollars).

Aboulafia sees two main reasons for the significant increase of the European production in the forecasted time span. First, the development of the Russian market and, secondly, he expects that the development efforts of Europe's leading industrial nations, Great Britain, France, and Germany, especially in the area of defence systems, will come to fruition.

The analysis foresees that Eurofighter, Rafale, NH90, and Tiger will represent a sizable market volume around the year 2005 at the latest.

For the rest of the world, the Teal Group is prognosting a decrease of production shares from today's 6,4 percent (3,5 billion dollar turnover) down to 3,5 percent (3,2 billion billion dollar) in 2005. 30 percent of this volume will be accumulated by the Canadian multi-concern Bombardier, such additionally reducing the share of the remaining nations.

This perspective, which is especially discouraging for the ambitious aerospace nations, predominantly in the Asian region, is mainly based on the obviously misunderstood interpretation of the meaning of national security and industrial progress. It is not enough, as in the case of the Japanese F-2, to offer a lower quality copy of the F-16 for three times the price. The same applies to the Taiwanese AIDC Chin Kuo project which is cheaper but supposedly of even worse quality. The study lists the Brazilian company Embraer and the Indonesian IPTN as further classic examples for the inefficiency of paragovernmental industries.

The right way, according to the study, is shown by the decision of the French government to merge the two leading aerospace concerns of the country, Aérospatiale and Dassault. The such merged "French Aerospace" will initially advance to the third position on the manufacturer's world hitlist on its way to form a strong industrial structure in the next century. While the financially strong Dassault is the warrant for profits in the fighter aircraft and business jet business, the so far loss-making Aérospatiale will be responsible for the larger but more difficult business with Airbus, Eurocopter, and the regional aircraft.

According to the Teal Group, a critical mass, such as the developing industrial group in France, will also be able to gain a political position, allowing to even reestablish failed projects, such as the Future Large Aircraft (FLA), in the defence budgets.

Other results of the study are that world market leader Boeing will expand its present share of the global aircraft turnover of 29,8 percent (16,2 billion dollars) to 35,1 percent (21,7 billion dollars).

McDonnell Douglas on the other hand, which at present is still number two in the combined business of the military and civil aircraft production, will loose its position to the new French conglomerate due to a forecasted 25 percent decrease in turnover (from 7,9 billion dollars to 5,9 billion dollar) and a resulting suspension of its civil aircraft business. The market researchers foresee a 30 percent increase of turnover potential for "French Aerospace", from today's 4,8 billion dollars to 6,3 billion dollars in 2005.

All in all, the Teal Group expects the USA to keep its leading position in the aerospace industry, based on the immense size of the US home market, as well as, on the existing know-how. No one could build on a similar experience in system integration, marketing, and financing.

The study points out that the US government is supporting their own industry's efforts by subsidizing the technological progress, and not, as is common in Europe, the useless capitalization processes.

From page 34 of FLUG REVUE 10/96