U.S. Military Aircraft Sales May Peak at $66.5 Billion

 - January 6, 2012, 9:45 AM
Aerospace Industries Association president and CEO Marion Blakey delivers the 2011 year-end review. (Photo: Paul Lowe)

U.S. military aircraft sales rose by 6.7 percent, to $66.5 billion, in 2011, the 10th and probably final year of growth before steep government spending reductions. Sales of military aircraft are expected to decline by $1.4 billion in 2012, according to the Aerospace Industries Association (AIA).

Military sales were the largest component of $218 billion in overall U.S. aerospace industry sales reported by AIA at its year-end review and forecast luncheon December 14 in Washington, D.C. The other components are civil aircraft ($50 billion), space ($46 billion), related products and services ($30 billion) and missiles ($25.6 billion).

U.S. exports of military aircraft, engines, parts, missiles, rockets and spacecraft totaled $10.3 billion in 2011, declining for a fourth consecutive year, according to AIA. Military aircraft imports totaled $123 million, double the 2010 amount.

Military aircraft sales first exceeded civil sales in 2003, but that trend may be reversing. After declining in 2010, civil aircraft sales improved by 3.2 percent in 2011 and are projected to grow in the next two years. But the military sector faces the prospect of $1 trillion in reduced defense spending over the next decade, $600 billion through a process of “sequestration,” or automatic cuts, required by the Budget Control Act enacted in August.

Marion Blakey, AIA president and CEO, spoke to the uncertainty regarding defense cuts in her luncheon address. “So sequestration is coming. Or is it?” she asked. “At this point, the picture isn’t any clearer than it was before.”