Modest growth predicted for aerospace industry

WASHINGTON — Despite anticipated financial turbulence in the new year, the aerospace industry should experience modest growth in 2009, a leading aviation group forecast Wednesday.

"The years of gangbuster growth are over, but we do not expect a significant downturn," said Marion Blakey, the head of the Aerospace Industries Association and a former chairman of the National Transportation Safety Board.

Even so, Blakey said, "We will be holding onto our seatbelts in uncertain times."

Others have been much gloomier about the coming year.

The International Air Transport Association warned Tuesday that the 230 airlines it represents would lose about $5 billion this year and about $2.5 billion in 2009. The group's director general, Giovanni Bisignani, told reporters in Geneva, Switzerland, that it was the worst revenue environment for airlines in 50 years.

And there were other signs the situation is worsening, especially for companies such as Boeing.

China's Civil Aviation Administration urged its airlines Tuesday to cancel or postpone delivery of the jets they'd ordered for 2009.

The Aerospace Industries Association's actual forecast warned airlines worldwide were facing an "increasingly difficult business environment."

"While strategies such as cutting capacity and increasing ticket prices have positioned airlines to meet current economic troubles, the market conditions forbode weakening demand for air transportation," the report said.

Overall, the industry, including civil aviation, defense and space, should grow at slightly more than 2 percent in 2009, Blakey said at a luncheon, cautioning that "extremely volatile economic times" could affect the forecast.

Sales in civil aviation, including commercial airplanes such as those built by Boeing, are expected to increase from $80.6 billion in 2008 to $86 billion in 2009. Military sales are forecast to rise from $54.7 billion to $57 billion, and space-related sales from $33.4 billion to $34.1 billion.

The group didn't estimate what would happen to employment next year, though Boeing already has indicated layoffs may be coming. More than 655,000 workers were employed in aerospace during 2008, about 10,000 more than in 2007.

Although civil aviation can be "susceptible" to economic downturns, Blakey said the industry remained confident because record backlogs of airplanes should provide a buffer, there have been few actual cancellations or delays in aircraft orders in the last several months, and U.S. airlines have yet to invest heavily in modernizing their fleets as foreign carriers already have.

"Aerospace is in a good position to weather the financial storm," she said.


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