Graham Warwick 2013 Forecast: Commercial Up, Defense Down Commercial production rising. Defense budgets falling. Economic uncertainties and regional instabilities that could affect both. That is the world the aerospace and defense industry faces entering 2013, and which is examined in detail in the pages that follow. But if there is one theme that recurs frequently through this latest edition of Aviation Week's annual forecast issue, it is China and its growing financial, industrial, political and military influence on aerospace and defense globally. By flying two new stealth fighter prototypes, operating an aircraft from a navy carrier for the first time (pictured) and unveiling a range of unmanned-aircraft designs over the past two years China, at least in the eyes of the public, has narrowed the U.S.'s technological lead. In the commercial world, China continues to be a major buyer of Western airliners and a growing market for business jets. The country has also cemented its position as a leading financer of the global air transport industry through its December acquisition of U.S. lessor International Lease Finance Corp. for $4.8 billion. But it is China's ambitions as a manufacturer that have caught the most attention. Although it is struggling to certificate the 90-seat ARJ21, Comac is pushing ahead with development of the 160-seat C919 to challenge Airbus and Boeing. Plans to buy Hawker Beechcraft out of bankruptcy collapsed in late 2012, but with its market and its money few doubt China will become a major player in business aviation through acquisitions and coproduction. Avionics and engines are next on Beijing's target list. For the first time, Aviation Week's annual forecast issue incorporates the global military analysis of our Defense Technology Edition and detailed commercial maintenance, repair and overhaul insights of our MRO Edition, as well as Aviation Week & Space Technology's outlooks for individual industry sectors ranging from combat aircraft to communications satellites. Also for the first time, five-year forecast data produced by Aviation Week Intelligence Network's own analysts are presented, providing projections for combat aircraft, military transports, rotorcraft and commercial aircraft deliveries for 2013-17, as well as detailed analyses of projected MRO demand. What emerges is a picture of an industry on divergent trajectories. For the large commercial aircraft sector, 2013 will see order-taking moderate, but production rates increase to record levels. The year will also see the first flights of key new aircraft: the Airbus A350, Bombardier CSeries and Mitsubishi MRJ. Business aviation remains flat, but the rotorcraft sector is rebounding. For the defense and security sector, 2013 will see lower spending globally and a focus on squeezing more out of existing platforms. Progress on developing the Lockheed Martin F-35 Joint Strike Fighter will be crucial, with the international partners increasingly concerned about escalating costs. For the space sector, the hope is 2013 will see solid backing for the fledgling transition to commercial from government launch services. Commercial suborbital passenger flights are also expected to begin by year-end. Aerospace 2013 has been prepared with analysis and data from Forecast International Inc. in Newtown, Conn. For more comprehensive market information, visit Aerospace, Defense & Power Systems - Market Research, Intelligence & Consulting Contact Ray Peterson, vice president for research and editorial services, at +1 (203) 426-0800, or e-mail him at [email protected] Key Intel DEFENSE: Global hotspots and country-by-country analyses of national priorities and programs. See pp. 52-69. MILITARY AIRCRAFT: F-35 delays and costs keep market hopes alive for other combat-aircraft makers. Market for military transports looks increasingly crowded. See pp. 70 and 75. UNMANNED AIRCRAFT: Military demand cooling off, but still growing as civil market begins a slow takeoff. See p. 80. AIR TRANSPORT: Region-by-region analyses of commercial aviation developments. Carriers adjust to depressed demand for air cargo. Crucial year ahead for airspace modernization. See pp. 105-114, 115, 117. COMMERCIAL AIRCRAFT: As order-taking slows, but production ramps up, manufacturers and suppliers are challenged by simultaneous development of new, derivative and re-engined aircraft. See p. 100. MRO: Detailed forecasts for narrowbody, widebody, engine, landing gear, avionics and components maintenance, repair and overhaul. See pp. 120-136. BUSINESS AIRCRAFT: Large-cabin aircraft and growing-economy markets remain the bright spots in an otherwise flat business-aviation market. See p. 137. ROTORCRAFT: Energy and military markets keep manufacturers healthy as they look toward future requirements and technologies. See p. 85. ENGINES: Commercial production ramps up as new engines enter testing, and military market prepares for next-generation powerplants. See p. 87. SPACEFLIGHT: From satellite communications to spacecraft launches, commercial providers taking over from government agencies. See pp. 94 and 97. TOP TECHNOLOGIES: Which defense and commercial advances will make the headlines in 2013? See pp. 89-93 and 139-142. OPINION MAKERS: Lockheed Martin's Marillyn Hewson, European Defense Agency's Claude-France Arnoud, International Air Transport Association's Tony Tyler and Aeronautical Repair Station Association's Sarah MacLeod. See pp. 48-49, 54, 96 and 104.