FLUG REVUE May 2002: BDLI views German aerospace industry prospects

AEROSPACE IN GERMANY: AN ENGINE FOR TECHNOLOGIES OF THE FUTURE

In this FLUG REVUE guest commentary, BDLI President Rainer Hertrich presents his view of the situation and prospects for the German aerospace industry on the occasion of the Berlin Air Show.

The Berlin Air Show ILA 2002 is taking place against a background of difficult economic conditions for aviation. It is therefore very encouraging that, contrary to all the prophecies of doom, the Berlin Air Show has been an established institution for some time now. The numbers of exhibitors and international participation – despite the present crisis in aviation – will further reinforce its position.

The tragic events of 11 September and their consequences, which depressed still further a world economy that was already sluggish, are unmistakable elsewhere in the aerospace sector. Civil aviation is dependent on economic cycles to an extent shared by virtually no other sector of the economy. It is maintained by passenger and freight volumes, and also by an adequate ratio of full fare paying business travellers. When times are hard for the airlines, this is rapidly felt by the aircraft manufacturers.

According to IATA, the customers of the aircraft manufacturers, the airlines, accumulated world-wide some $15 billion of losses last year. In 2002 and 2003 the German aerospace industry will therefore see a break in the continuous upward trend it has enjoyed for six years, a trend which carried its turnover for the year 2001 to an estimated peak value of €15.3 billion and took the number of persons employed, at 71,200, above the threshold of 70,000 for the first time since 1993.

Nevertheless, the Berlin Air Show will signal a positive departure from the current gloom, not simply in relation to the number of exhibitors. The medium- to long-term positive prospects in global air traffic permit an optimistic view of the future. In particular, successful new civil aircraft programmes, such as the A380 ultra-large aircraft and the new German family of regional jets from Fairchild Dornier, bear witness to the innovative drive of German industry. This impressive force will be felt by visitors to Berlin, who will include many international governmental, parliamentary, military and industrial delegations.

Quite apart from its ever stronger international significance, the Berlin Air Show should be viewed as a showcase. Germany is not only one of the most important markets world-wide, but its position as one of the leading aviation nations of the world is reflected in the strength of the German aerospace industry.

The German Airbus plants and their domestic suppliers account for 40 per cent of the successful Airbus family. If Airbus can re-establish its position after the present aviation crisis has been surmounted, this can generate sales of over €600 billion over the next 20 years, from which Germany can profit directly.

The world market leader in the helicopter sector, Eurocopter, obtains approximately one-third of its turnover from the sale of helicopters built in Donauwörth. Significant advances in research and development are achieved in Germany.

Fairchild Dornier is currently developing a new family of regional aircraft. The roll-out of the Dornier 728, which took place in March, is a major success for Fairchild Dornier despite the present turbulent environment.

The biggest European satellite to have been built to date, the environmental satellite Envisat, to which Friedrichshafen contributed a significant German share, was carried into orbit six weeks ago with Ariane 5. Friedrichshafen is Europe's leading production location for earth observation satellites.

The Envisat launch in turn is a proof of the quality of Ariane 5's upper stage propulsion, which was built in Bremen. Thanks to its upper stage competence, which is concentrated in Bremen, and to capable suppliers such as MAN Technologie, Germany enjoys an approximately 30% share of the Ariane programme.

The two engine manufacturers MTU and Rolls-Royce Deutschland are renowned for their successful aircraft and helicopter power plants. Through their research and development endeavours over the last few years they have succeeded in reducing noise emissions and fuel consumption significantly. Over the last 30 years noise emissions have been reduced by almost 20dB to one-quarter of the subjectively experienced sound intensity. The present goal is to halve them again.

In Germany the major system manufacturers rely on strong small and medium-sized enterprises. For example, the supply chain includes companies like Liebherr, AOA Apparatebau Gauting and Autoflug which are involved on many important aerospace programmes.

In the area of military aviation, German industry has substantial work shares in the Eurofighter programme and also in the NH90 and Tiger helicopter programmes. Now, that the parliamentary hurdles have been surmounted, Germany's 73 aircraft make it the biggest customer of the A400M military transporter, in return for which it is to assume a share of 37% of the total volume.

The significance of aerospace for the German economy is especially apparent in its contribution to the knowledge society: research and development accounts for approximately 20% of the industry's turnover, making it an important technology engine for German industry. It is also one of the strongest globalised branches of the economy: over 60% of the turnover of the German aerospace industry – almost two-thirds – is accounted for by exports.

Rainer Hertrich is President of the German Aerospace Industries Association (BDLI) and Chief Executive Officer of EADS (European Aeronautic Defence and Space Company).

From FLUG REVUE 5/2002

Last updated 10 April 2002

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