Richard Aboulafia

Richard Aboulafia

Contributing columnist Richard Aboulafia is vice president of analysis at Teal Group. He is based in Washington.

China’s Aerospace Strategy In Trouble 

As a prospective new entrant to the aviation industry, it's hard to be better positioned than China. The country offers the second biggest national market in the world, one that is growing ever larger and more important and benefits from plenty of engineering talent. It's difficult to believe China will not eventually have some kind of large aerospace industry as long as it stays a national priority.

Reassessing The A380 

Airbus can barely keep up with demand. A combination of high fuel prices and low interest rates has helped boost the jetliner market to record levels, with more growth ahead. But there is one exception to this happy situation: the A380. It is time to face some tough facts about the program.

Boeing Needs To Emphasize 777X Sales 

Has as a new jetliner ever been launched as reluctantly as the 777X? Boeing usually prefers to follow its competitors in new product development, waiting until it can create a “killer” for a given segment. The 777X, like the original 777, looks set to enter service several years after the competition, in this case the A350-1000. But while the 777 became a category killer, this time the late-adapter approach may have significant disadvantages.

Perfect Storm Buoys Airframers, But For How Long? 

In 2012, deliveries of large commercial jets manufactured by Airbus and Boeing exceeded $88 billion in value, at estimated prices, up 57% since 2008. During that same four-year period, the global economy had its worst years since World War II. The macroeconomic recovery has been anemic, and demand for air travel only marginally better. While airline revenue passenger kilometers grew 6.9% in 2010 following a 3.5% decline in 2009, growth eased to just 5.3% in 2011.

Reengining The 737 Makes Business Sense For Boeing

Dislike Boeing's decision to follow Airbus and reengine its single-aisle product? You are not alone. Many analysts and commentators have expressed disappointment.

Point-Counterpoint: Offshoring to China--Snare! 

Is the aerospace industry on the cusp of a great wave that will shift work to low-cost producers in China? Or is offshoring a minor phenomenon being exploited by companies to win concessions from workers and local governments? Taking the former view is William C. Parr, a faculty member of the University of Tennessee's Aerospace Executive MBA program. He recently returned from a three-month stay in China, where he taught and conducted research on offshoring and Chinese management practices.

Hawk Reasserts Trainer Market Dominance 

The trainer market is fast becoming dependent on shared programs. BAE Systems' Hawk won a notable victory in this market in mid-2003, with an order for the U.K.'s Military Flying Training System (MFTS) competition. While only good for an initial 20 planes (with 24 more options), the order preserves a production line that had been in danger of closing. The order, and the launch of MFTS, also cements the U.K. lead in trainer manufacturing and services.

Fighter Makers Reassess Options 

In October 2003, Singapore short-listed the Eurofighter Typhoon, Dassault Rafale and Boeing F-15 for its next fighter purchase. While for a small number of planes--only 10 at first, with another 10 to follow--this competition has broad implications for aircraft contractors in the U.S. and Europe. It also speaks eloquently about new dynamics in the fighter market.


Rotorcraft Market Politicized by European and American Nationalism 

Rotorcraft, like many other segments of the aerospace industry, have always been subject to nationalism and closed borders. Despite pressures in favor of globalization, rotorcraft markets are increasingly politicized.

Military Transport Market Grows 

The military transport market underwent a major change in 2003. For decades, European countries have failed to spend more than token funds on dedicated military lift. But in May, Europe's Occar (Organisation Conjoint de Cooperation en matiere d'Armement) arms agency signed the firm procurement contract launching production of the Airbus Military Co.'s A400M.

Bizjets Search for Optimism 

After two years of depression in the business jet market, it's natural to begin scanning the horizon for change. Unfortunately, there are few signs of a return to prosperity for what had been the best aviation growth sector in decades.

The worst news concerns used aircraft availability and pricing. Reports show just over 2,000 turbine-powered business aircraft are on the market, out of a total fleet of about 13,300. Pricing also remains soft, with many airplanes selling at an average 20% less than their 2000 peaks.

Future of U.S. Bomber Force Uncertain 

The Air Force's consistent preference for tactical combat aircraft continues to weigh against the entire concept of the manned strategic bomber. New bomber development programs are nowhere in sight, and even the existing fleet is under budgetary pressure. Nevertheless, the U.S. bomber fleet's continuing strong performance in recent overseas operations will go a long way toward strengthening the case for maintaining this capability.

Commercial Transport Market Still in Rough Shape 

Despite hopes for an imminent recovery, the world's air transport industry remains hobbled by slack demand and a changing business environment. Airline uncertainties and a difficult economic outlook also are complicating manufacturers' efforts to position themselves for the next market upturn. Traffic and yields remain below 2001 levels. The inactive jetliner fleet still hovers near 2,000 airplanes, more than 13% of the total fleet.

Military Rotorcraft Spending 

In the past decade, the world rotorcraft market has been hit by the downturn in military spending. The military side makes up the overwhelming majority of this market, and like other military segments, procurement has fallen as new systems are delayed and armed forces coast on existing inventories.

Airbus vs. Boeing 

Competitive tensions between Airbus and Boeing are truly at a new high point following Airbus Industrie's late-December decision to launch its A380 (formerly A3XX) mega-transport. This means Airbus and Boeing now have intense competitions going at every level of the jetliner spectrum. It also means the manufacturers have two fundamentally different philosophies of how the air transport market will develop in the coming years.


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