FocusAircraft industry avoids airline woes

14 April 2008 23:58  [Source: ICIS news]

By Al Greenwood

HOUSTON (ICIS news)--Recent turmoil in the airline industry comes in contrast to the optimistic outlook for aircraft makers, an industry analyst said on Monday.

"Generally it's a robust outlook," said Richard Aboulafia, an aviation analyst for the Teal Group, a US aerospace and defence consultant.

In a report, Aboulafia writes, " the aircraft industry stands in stark contrast to its cousin, the airline industry".

For US chemicals, the aircraft industry was a $2bn (€1.3bn) end market in 2007, said Kevin Swift, chief economist for the American Chemistry Council (ACC), a trade group.

While important, aircraft does not approach the construction industry, a chemical end market worth $15.6bn, according to the ACC.

Nonetheless, aircraft is a large consumer of carbon-fibre composites, synthetic fluids and coatings, Swift said. Moreover, the aircraft industry will offset - if only partially - the downturns in the automotive and construction industries.

The world's aircraft industry will grown on demand from the military and global markets, Aboulafia said.

As such, Aboulafia forecasts a compound annual growth rate of 9.6% from 2004 through 2010.

"This industry is firing on both turbines," he wrote in his report. "The first simultaneous civil and military market upturn in decades is giving most primes a strong boost."

His report estimates that the world producers will make 47,709 turbine-powered aircraft from 2007 through 2016, valued at $1,370bn. Out of that total, the civil sector will make up $1,022bn.

By comparison, producers delivered 32,963 aircraft valued at $920.7bn from 1997 through 2006, the report said.

In 2016, the US share of aircraft production will rise to $86.1bn - 55.6% of the world's total, the report said. That is up from $61.5bn or 53.2% in 2007.

Europe's share will rise to $53.5bn - 34.5% - in 2016, the report said. That is up from $40.3bn or 34.8%.

($1 = €0.64)

By: Al Greenwood
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