Europe's aerospace leaders are urging their governments to ensure that the industry does not fall victim to the financial crisis due to a collapse in finance.
"The biggest risk to the aerospace industry is a liquidity and finance collapse, rather than an orderbook collapse," says Ian Godden, chief executive of the Society of British Aerospace Companies.
He says that in early October industry leaders from aerospace companies across Europe wrote to their governments to ensure that the financing for the region's suppliers is maintained. The approaches were co-ordinated through an meeting held by the Aerospace and Defence Industries Association of Europe in early October.
"The letters raised the subject of financing and liquidity to support the supply base, and urged governments to ensure that export control guarantees aren't going to be affected by the credit crunch," says Godden.
The SBAC is concerned that the situation could become critical in the next two to three months. Godden warns that funding through the export credit agencies is already due to increase "substantially" next year. "If liquidity runs dry then things will definitely fall off a cliff," he says.
The survival of the industry's "customers" - ie the airlines - is a race against time, says Godden. He believes that if the two critical factors affecting airlines' financial situation - the price of fuel and interest rates - decline fast enough then they should be able to cope with the slowdown in demand for air travel from consumers.
Source: Flight International