Last Dispatch From Paris
Le Bourget
The 47th running of the biennial Paris Air Show closed as it always does. Huge crowds on the public days of the last weekend, an air display of fighter and commercial aircraft, and dozens of vendors hawking baseball caps, t-shirts, jackets, refrigerator magnets, and plush toys with the air show’s logo plastered on them.
This year’s air show motif was a sign of how the industry views itself in the present day. Instead of going for some ultra-modern looking, space age logo that looks like the trademark of some hi-tech corporate behemoth, the show used a set of simple drawings that looked like cartoon aeroplanes and rocketships from a pre-schooler’s coloring book.
It is appropriate because in the aftermath of up and down fuel costs, the ripple effects on the commercial airline industry following 9/11, and the troubles at Europe’s Airbus the overall attitude of the industry is almost that of childlike optimism. “I have never seen the aerospace industry in general so upbeat,” said one executive from France’s Dassault Aviation. “It is as if people believe all of these troubles are now behind us.”
Many of the difficulties that the last few years have brought to aerospace firms worldwide may now be finished, but there are a number of potential pitfalls ahead.
The Lockheed Martin F-35 Joint Strike Fighter (JSF) is one of the most ambitious programs of its kind and involves numerous foreign partners. If it proceeds according to schedule and without overshooting its cost numbers too far it will be the most successful program in the history of modern military aviation. However, if delivery dates slip to the right or costs rise too high there could be defections.
And there are plenty of firms out there willing to step in to provide a cheaper and more readily available solution. Already Sweden’s Saab Aerospace has offered their JAS-39 Gripen fighter to Norway and Denmark to try and woo them away from the JSF. The Royal Australian Air Force opted to buy a batch of Boeing F/A-18Fs instead of waiting for its JSF’s to be delivered. The RAAF are still in the JSF program, but any further delays could see them decide to go with more F/A-18s instead.
In Europe much depends on the mammoth A380 double-decker super jumbo airliner. That program is behind schedule because of production delays and most of the companies (i.e. DHL, UPS) that had originally planned to buy a cargo version of the aircraft have cancelled their orders in favor of other options. Any hiccups here and Europe’s aerospace industry could be significantly damaged by forced layoffs and drops in share prices.
The defense business in the west has also become somewhat precarious due to its reliance on so many international alliances and interlocking companies. One of the major partners on JSF is the UK’s BAE Systems, which--it was announced today--will now be investigated by the U.S. Department of Justice in relation to continuing stories about kickbacks and other payoffs to former Saudi ambassador to the United States Prince Bandar bin-Sultan and other officials in Riyahd.
It is not yet clear if the probe is all for show in order to quell the cries of those who are understandably concerned about so much unaccounted for money in Saudi hands, or if DoJ intend to go after the UK defense giant with even one-tenth of the ferocity with which they have tried to destroy Scooter Libby. But, it does raise the question of whether it is possible to maintain U.S. legal standards on corrupt practices while linked up with so many foreign partners and how such efforts might affect a program as important to U.S. industry as the JSF.
Over all of these problems of corporate accountability, program schedules, and the marketplace hovers the specter of Iran. Numerous sources now assert that they believe Russia’s Rosoboronexport, which is controlled by ex-KGB FOV (Friend of Vladimir), Sergei Chemezov, is on the verge of a major arms sale to Teheran. If the numbers and types of weaponry are true, it could signal a major shift of the balance of power in the Middle East and create more instability in a region that is already as unstable as can be.
So, is the aerospace industry being childishly (and blindly) positive about the future. I don't think so. It seems more as if people are trying to take a few minutes to enjoy the good news and grab a little breathing space before having to face another round of troubles. How far will the fortunes of the industry take a tumble--or will they at all?
We’ll all be here to tell you about it in two years’ time.