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2007 Outlook Overview 

What a difference a year makes.

Early in 2007, when Aviation Week & Space Technology published its annual Source Book industry analyses and specification tables, the world economic outlook envisioned stability and growth, excellent conditions for the continued prosperity of the global aerospace industry. Recession was no more than a highly unlikely worst-case scenario that never happened.

U.S. Regionals’s Unit RevenueFalls Below Network Carriers’ 

For the first time since 2004, when regional airlines started submitting quarterly financial data to DOT’s Bureau of Transportation Statistics, network airlines’ unit revenues exceeded those of the regionals in the third quarter of 2007.

The network carriers’ revenue increased 0.8 cents per available seat mile to 14.9 cents in the quarter, compared with the third quarter of 2006, while the regionals’ dropped 0.3 cents per ASM, to 14.7 cents. As usual, network airlines’ unit costs were lower than the regionals’, 13.6 cents per ASM compared with 14 cents.

AIA Projects Another Rosy Year for U.S. Aerospace 

U.S. aerospace has attained peak after peak in significant business-performance measures during the past few years, and the Aerospace Industries Assn. (AIA) sees more of the same in 2008.

Aerospace and defense industry results hit new highs, expected to keep climbing 

U.S. aerospace has attained peak after peak in significant business-performance measures during the past few years, and the Aerospace Industries Association (AIA) sees more of the same in 2008.

"This trend will continue in dramatic fashion," new AIA chief Marion Blakey said in her first address to the annual AIA year-end luncheon outside Washington. "The news through 2010 should be equally good." (See charts p. 5-8).

Commercial Jet Sales To Outpace Military Revenues In ‘08, Says AIA 

U.S. sales of commercial aircraft will overtake military aircraft revenues next year for the first time since 2002, according to estimates issued yesterday by the Aerospace Industries Assn.

Lower public-service 'barriers,' AIA committee recommends 

The White House and Congress should simplify and reduce requirements and restrictions that make it hard for the Pentagon to recruit, vet and secure Senate confirmation for top political appointees, the legal committee of the Aerospace Industries Association said Oct. 31.

In an attempt to pluck what chairman Paul "Whit" Cobb, Jr. called the low-hanging fruit of a cumbersome process, the panel called for changes in nomination and confirmation procedures, executive compensation, financial disclosure requirements and restrictions on post-government employment.

U.S. Majors Keep Expanding Internationally, Contracting Domestically 

Nothing succeeds like success. The big U.S. international airlines, profitable once more, are sticking with a key element of the strategy that got them back into black ink: expansion of international service and contraction of domestic capacity.

The six carriers are by no means in lockstep—international-capacity increases at the six airlines during the past three years varied from 53.2% at Delta Air Lines, mostly in Atlantic markets, to 0.4% at Northwest Airlines, which grew 13% in the Atlantic but shrank 6.3% in its Pacific stronghold.

U.S. Adds Delta, US Airways to China-Service Roster 

All six of the big U.S. international airlines will serve China by 2009 under carrier-selection and frequency-allocation decisions issued Sept. 25 by the U.S. Transportation Dept. The results offered something for everyone in the proceeding except for the longest of long shots—MAXjet Airlines, which wanted to expand its low-fare, all-business-class product to U.S. aviation’s most hotly contested foreign destination.

EC's Boeing Subsidy Complaint Goes Before WTO Panel This Week 

The European Commission aircraft-subsidy complaint against the U.S. will go before a World Trade Organization panel this week in Geneva.

An open session on Wednesday will deal mainly with the particulars of the EC complaint, the U.S. response to it and EC arguments against the U.S. response. At a closed session on Thursday, panel members will be able to ask questions of both sides, and the EC will offer evidence of alleged damages.

Don't Change Denied-Boarding Rules, Compensation, ATA Says 

DOT shouldn't increase compensation for airline passengers who are involuntarily denied boarding or extend denied-boarding protection rules to aircraft with 30-60 seats, the Air Transport Assn. told the department.

Don’t Let Iraq Rhetoric Obscure Progress Against Terrorism 

That cloud of dust you see on the political horizon comes from preparations by all sides for what was once expected to be a climactic moment: this week’s assessment of the surge of U.S. forces in Iraq and the potential for security and stability there. When it reaches us, the storm threatens not only to blur the Iraq issues. It also may obscure the sixth anniversary of the 9/11 attacks and the need for renewed resolve—and resources—in protecting the U.S. from the threat of terrorism.

Denied-Boarding ANPRM Spurs Ban-Bumping Bid 

A U.S. Transportation Dept. advance notice of proposed rulemaking on denied-boarding compensation, asking mainly whether and how much compensation limits set in 1978 should be increased to reflect nearly 30 years of inflation (DAILY, July 12), is generating substantial opinion that DOT should ban the practice altogether and fine airlines for doing it.

Blakey To Head Aerospace Group When FAA Term Expires 

FAA Administrator Marion Blakey will succeed John Douglass as president and CEO of the Aerospace Industries Assn., AIA announced yesterday.

For Aviation’s Greenhouse-Gas Emissions, It’s Technology Versus Growth 

Commercial aviation, faced with worldwide concerns about greenhouse gases and looming regulations to reduce them, can count on advances in technology that will help to clean up its operations to a substantial degree during the coming 20 years. But growth in air travel, both an enabler and a product of the burgeoning global economy, is likely to use up the environmental gains faster than they can be achieved.

Baucus Needles Airlines on Frequent-Flier Redemptions 

Between blackout periods, seat supply and other restrictions, it’s getting harder and harder to redeem frequent-flier miles, and this has not escaped the notice of Chairman Max Baucus (D-Mont.) of the Senate Finance Committee. Opening a hearing on FAA tax proposals, Baucus welcomes a West Coast academic witness with word that he will receive 4,824 mi. for his trip. Later, however, he says he’s learned that the miles are redeemable only for magazine subscriptions. “I guess you’ll have some reading material for the flight home,” he says. “Thanks again for joining us.”

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