Security lifts aerospace forecast

Although it is predicting a $6.6 billion overall decline in sales for 2002, the Aerospace Industries Association is projecting an increase in military spending on aircraft, space systems and related products, including information technology solutions focused on security.

John Douglass, AIA president and chief executive officer, said the aerospace industry had a banner year in 2001 with more than $150 billion in sales, a third of which came from civilian aircraft. But he said the events of Sept. 11 kept this year from being the industry's best ever, and the downward trend will continue into 2002.

The AIA is forecasting $144.4 billion in sales for 2002, including nearly $37 billion on military aircraft, more than $31 billion on space systems, and almost $13 billion on missiles, but only $39.2 billion on civil aircraft, which is a decrease of more than 20 percent.

"The bottom is not falling out," Douglass said during his Dec. 12 address at the AIA's year-end review and forecast luncheon in Washington, D.C.

He predicted "solid expansion" in the parts of the aerospace industry related to homeland security, including IT for airport security and tools for identifying and tracking travelers.

Douglass also said the airlines and Federal Aviation Administration typically depend on NASA's research and development work for future security systems and advancements in air traffic control. He said funding for that must be covered in future NASA budgets in order to keep up with "pent-up demand" in the civilian and defense markets that should result in growth in the aerospace industry in 2003 and 2004.

The events of Sept. 11 have resulted in fewer people choosing to fly, but "after a while the demand comes back...and the NASA budget must be fixed to match that growth," Douglass said.