Farnborough 2010: Keep Calm And Carry On
British industry in particular—and the wider sector in general—will want to put its best foot forward at the Farnborough showcase, but it is also taking a stride into the unknown.
Turmoil in the U.K. domestic economy, as well as the recently elected government's warning of an age of austerity and cross-departmental budget cuts form a challenging backdrop for one of the world's premier aerospace trade shows.
On the European stage, economic strife also continues. Greece's is the worst plight of European Union economies, but it is not alone in facing financial woes. Budgets are under scrutiny or are already being cut in capitols across Europe, with defense expenditure a guaranteed target.
In the U.S., the defense dollar is also under strain, though from a far higher baseline than Washington's less well-off European military counterparts.
The commercial airline sector, conversely, is looking healthier—at least in the U.S. and the Asia-Pacific region, where passenger and freight traffic are picking up. The European picture, however, is less appealing, with the transient impact of the volcanic ash disruption merely adding discomfit to the economic malaise. U.K. flag carrier British Airways is struggling with a union dispute that it can ill afford but senior management is unwilling to avoid.
If both civil and military show attendees' immediate focus is on the sector's financial welfare and the broader economic outlook, there are signs on the horizon that the aerospace world's centers of gravity may become more numerous and subsequently less concentrated.
Brazil's Embraer is now a fixture in the regional arena, and several countries are looking to emulate the manufacturer's success, either in the same area or in the narrowbody airliner market.
These challenges will be reflected during the first four days of the July 19-25 trade show, which will include themed morning conferences. Ian Godden, chairman of aerospace and defense lobbyist ADS, the parent of show organizer Farnborough International, says the conference program is meant to provide a platform "to discuss key issues that are affecting their business with fellow members of the industry and government officials." There will be no shortage of topics.
Monday July 19 will kick off with the theme of "aerospace" focused on "the future of aviation design and technology." With the delay of next-generation narrowbody projects, the further renewal of technology for Airbus A320 and Boeing 737 aircraft will be of considerable interest. The direction of talks between Airbus parent EADS and comparative regional upstart Embraer will be a point of discussion, as will the engine manufacturers' respective strategies in addressing the narrowbody sector.
The theme for the second day's conference is defense; with the outcome of a U.K. Strategic Defense & Security Review to be made public likely in the fourth quarter, domestic concerns will no doubt be on the agenda. However, U.S. industry is also girding for a reduction in Pentagon procurement funds. One company president says he anticipates the U.S. Defense Department procurement allocation could fall by 3-4% as financial pressures from other areas of defense spending come to bear.
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