Civil Aircraft Sales Set the Pace of U.S. Aerospace

AIN Air Transport Perspective » December 23, 2013
Boeing 787 Dreamliners progress through final assembly at Boeing’s widebody plant in Everett, Wash. (Photo: Bill Carey)
December 23, 2013, 10:40 AM

U.S. civil aircraft sales will increase by 7.7 percent, to $67 billion, this year, providing the only growth within an aerospace sector that will see overall flat results. Total aerospace sales, including sales of military aircraft, missiles, spacecraft and related products and services, will total $220 billion, down about $2 billion from 2012, the Aerospace Industries Association (AIA) estimates.

“Commercial aviation remains an American success story,” the AIA states in its 2013 year-end review and forecast, released on December 18. “Commercial aircraft represent America’s leading manufactured export, supporting jobs and economic growth across all 50 states.”

The nearly $5 billion increase in civil aircraft sales failed to offset a nearly $4 billion decrease in military aircraft sales and a $2 billion decline in civil and defense space sales, both of which more directly suffered the effects of U.S. government “sequestration” budget cuts. The AIA predicts that civil aircraft sales will continue growing, reaching $72 billion in 2014.

Civil aircraft and space exports of $99 billion, representing the bulk of $112 billion in overall U.S. aerospace exports, proved one bright spot. Total exports resulted in a net surplus of $73.5 billion compared with imports, resulting in the U.S.’s “best aerospace trade balance in history,” according to the AIA.

Boeing’s total backlog stands at 4,787 aircraft worth $344 billion, representing seven-and-a-half years of work at current production rates. Sixty-six percent of the orders came from foreign carriers. The AIA lists 3,467 Boeing 737s on order, 890 787 Dreamliners, 328 777s and 51 each of the 747 and 767. Boeing will ship 650 aircraft this year, increasing to 710 next year, the association estimates.

Supporting the reauthorization of the U.S. Export-Import Bank by Congress next year stands as a key goal, the AIA said. Ex-Im Bank financing, which helps foreign operators purchase Boeing and other U.S. manufacturers’ aircraft, has come under fire in recent years, most notably from Delta Air Lines, for placing U.S. carriers at a competitive disadvantage.

“It would be absurd to pull the plug on export credits that promote U.S. jobs and result in savings to the treasury, while our foreign competitors continue to enjoy heavy financial backing from their governments,” Marion Blakey, AIA president and CEO, said in a keynote speech announcing the forecast results in Washington, D.C.“This is especially true when key parts of our supplier base are counting on civil aviation to help keep them going as the defense budget draws down.”

Other priorities the association will pursue include “full implementation” of the NextGen ATC modernization effort and supporting the wider introduction of unmanned aircraft systems in U.S. national airspace by 2015, as Congress has mandated. According to the AIA, the Federal Aviation Administration reduced NextGen programs by 15 percent within its capital budget as a result of Fiscal Year 2013 sequestration cuts. The association said it will continue to push for “an adequate balance between operating requirements and long-term capital needs” of the FAA.

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