Defense Budget Smoke and Mirrors: Aboulafia at IESF
It is an interesting time to be in the military and aerospace (mil/aero) community. The market has been marked by a wealth of alternating highs and lows, recessions and successes—and that’s just since the turn of the century.
Several years of notable growth came to a halt near the end of the past decade, which was followed by a significant decline in investment. Today, however, the overall mil/aero market has emerged from the doldrums, moving out of the red and into the black—well, for the most part.
After a lot of losses and red ink in the years from 2008 to 2012, the mil/aero community delivered $170 billion (U.S.) in new aircraft in 2013, described Richard Aboulafia, vice president, analysis at Teal Group Corp. in Fairfax, Va. In a keynote presentation at Mentor Graphics’ Integrated Electrical Solutions Forum (IESF), entitled “Back in Black: Aviation/Defense Industry Overview and Forecast,” Aboulafia provided a comprehensive snapshot of the market and market drivers.
Large commercial airliners, or big jets, accounted for more than half of the market in 2013, Aboulafia described. Jet airliners, more commonly called jetliners, reached $94.4 billion last year. How did airframe manufacturers react to this trend? Industry pundits to sit back and enjoy the ride, rest on their laurels, lick their wounds, and refill empty coffers drained during tough times. To the surprise of many, manufacturers went into what Aboulafia calls “hyper growth mode.” Aboulafia even noted during his keynote that, despite his considerable experience covering the mil/aero market, he had not seen this before.
Aboulafia is one of this geek’s favorite aerospace forecast and market health speakers stating, “I have never seen a defense budget as full of mirrors and smoke.” This geek certainly hopes to see Aboulafia at next year’s mil/aero IESF!
Posted April 30th, 2014, by J VanDomelen
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