U.S. military set to reduce spending on aircraft procurement and research

ARLINGTON, Va., 11 Nov. 2008. The U.S. Department of Defense (DOD) is expected to reduce spending for aircraft procurement and RDT&E over the next decade from $56 billion this year to $42 billion in 2019, say defense industry analysts who are members of the Government Electronics Industry Association (GEIA) segment of the Information Technology Association of America in Arlington, Va.

Nov 11th, 2008

By John Keller

ARLINGTON, Va., 11 Nov. 2008. The U.S. Department of Defense will cut spending for aircraftacquisition and research over the next decade from $56 billion this year to $42 billion in 2019, say defense industry analysts who are members of the Government Electronics Industry Association (GEIA) segment of the Information Technology Association of America in Arlington, Va.

This would represent a decade-long reduction in spending for aircraft structures, avionics, engines, sensors, and other electronics by one-third, according to GEIA analysts. Among the reasons for such a steep decline in military aircraft spending is the expected phaseout or reduction in defense supplemental spending, which funds ongoing military operations in Iraq and Afghanistan.

These figures also represent a drop in the combined annual growth rate (CAGR) of U.S. military aircraft spending of 2.1 percent from 2009 to 2014, and a reduction in the CAGR of military aircraft spending 3.6 percent from 2014 to 2019.

Spending for aircraft procurement between 2009 and 2019 is expected to fall from $42 billion to $25 billion -- a drop of 20 percent -- and spending for aircraft research, development, test, and evaluation (RDT&E) is expected to fall from $14 billion to $7 billion -- a cut of 50 percent.

During the next 10 years, aircraft for the U.S. Air Force is expected to fall from $25 billion to $22 billion; Navy and Marine Corps aircraft spending from $23 billion to $13 billion; Army aircraft spending from $7 billion to $2 billion; and defense agencies aircraft spending is expected to increase from $1 billion to $2 billion, GEIA analysts predict.

Among the major trends that GEIA analysts see are fewer actual aircraft, but each with increasing capability; greater emphasis on multi-mission aircraft; common technologies among different aircraft; increasing electronic warfare capability; increasing use of simulation for pilot proficiency; wideband signals intelligence and data links; and increasing emphasis on fuel and electrical power efficiencies.

One area that Pentagon planners must consider is ageing aircraft, GEIA analysts point out. The facts are stark. The average age of U.S. Navy support aircraft is 24 years. The average Air Force bomber is 30 years old, Air Force tankers are 47 years old, Army combat helicopters are 28 years old, and Air Force jet fighters are 23 years old.

Projected declines in military aircraft spending parallel overall anticipated reduced or flat spending for in U.S. defense in procurement and RDT&E, GEIA analysts say. Over the next decade military procurement spending is expected to increase only slightly from $101.15 billion to $102.53 billion.

The procurement account is for new ships, aircraft, and combat vehicles, and electronic equipment -- as well as for repair and upgrades, which U.S. forces severely need after so many years in Iraq and Afghanistan.

GEIA predicts a decrease in the overall defense RDT&E budget over the next decade from $78.1 billion to $55.54 billion in 2019. That means less for developing new weapons and technologies.

Overall, GEIA predicts the entire defense budget might have an insignificant increase over the next 10 years. The organization's latest figures have the DOD budget increasing from $491 billion to $534 billion between 2009 and 2019.

Among the reasons for projected stagnant or decreased spending for military procurement and RDT&E are expected hefty increases in military operations and maintenance spending, and for spending to support expected increases in Army and Marine Corps personnel.

GEIA predicts the operations and maintenance account will increase from $167.92 billion to $229.1 billion over the next 10 years. That's where the fuel costs are, as well as food, clothing, and related expenses.

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