The last few weeks have seen record orders reported throughout the industry. They have also seen stock markets tumble and experts predict a recession in the USA and much of Europe. Is the boom about to go bust? Is the aerospace industry on the edge of a precipice?
The evidence so far is unconvincing. That the American economy is ailing and likely to technically slide into recession is not disputed. Neither is the claim that the rest of the world is being hit by a slowdown in demand from US consumers.
But when it comes to the aerospace industry, a US downturn will not have an immediate impact. It is mainly airlines and operators in Asia, Russia and the Middle East that have been filling the orderbooks in commercial and business aviation of the past four years. And this despite record oil prices. Investors such as billionaire George Soros are convinced a US recession is inevitable, but aviation leaders such as Emirates' Maurice Flanagan say they see no warning signs, with yields and demand for seats as strong as ever.
At the moment, carriers in developing countries cannot get aircraft quickly enough. Of course, they depend on strong domestic economies and, in a global market, such economies cannot escape unscathed from a US crisis. But this century has seen a shift in the balance of power in the global economy. When America sneezes, the rest of the world may still catch a cold. But prolonged and painful flu is no longer inevitable.
Source: Flight International
