EVERETT, Wa., 24 April 2014. In the military aircraft market, the sky is not falling; we are just experiencing erosion” and the effects of sequestration, budgets, and politics, says Richard Aboulafia, vice president of analysis at Teal Group Corp., “Back in Black: Aviation/Defense Industry Overview and Forecast” at the Integrated Electrical Solutions Forum (IESF) hosted by Mentor Graphics at the Future of Flight Museum at Boeing’s Paine Field in Everett, Wa.
“The good news is there has been a massive uptick in military combat aircraft investment over the past few years; the bad news is we didn’t really buy anything,” says Aboulafia. That is, he explains, military fighter aircraft investment roughly equaled that of “the great years of the Reagan buildup in terms of budget,” he explains. Yet, whereas manufacturers were rolling new military aircraft off the production line consistently in the Reagan years, just 75 were produced last year, Aboulafia laments, noting the expensive Lockheed Martin fighters and a problem with Boeing fighters.
When it comes to world fighter production shares, “the F-35 is coming to eat us all alive; there’s no way to sugar-coat it. The F-35 devouring everything [budget-wise] in U.S. and abroad,” Aboulafia says, mentioning that the Republic of Korea has confirmed F-35 fighter jet orders.
The U.S. military fixed-wing market shows a “waterfall” in which “everything [every military aircraft program] dies except the F-35, including the C-17, F/A-18, F-15, F-16, F-22, T-45, T-6, C-130, T-X, and B-X. There’s a lot riding on the F-35,” Aboulafia affirms.
European military fixed-wing deliveries have been rescued by the Airbus A400M, which has survived, Aboulafia explains. “Airbus is doing a good job of weaning themselves off military contracts, yet investing in military aeronautics. The C-130J has the longest-running production timeline in the world, yet the A400M is taking over the C-17 market.”
Boeing military fixed-wing deliveries are characterized by a “catastrophic fall off,” Aboulafia admits. “Deliveries of the P-8 and KC-46 tanker are keeping the production line alive through 2020.”