Even its most ardent supporters would have to admit that the US dollar's spectacular slide against most of the world's leading currencies has left it looking decidedly less solid of late. For the world's aerospace and airline industries, at least those outside the USA, it is a further uncertainty in an already uncertain world, one they could well do without.
No-one has yet seriously suggested that the world ditch the US dollar as the international standard for civil aircraft pricing, but should they? Should aviation follow other international industries and price in a wider mix of yen, Deutschemarks or even ECUs?
True, the issue is a complex one. There are sound reasons for aircraft transactions to be priced in a universal currency. Aircraft are highly mobile assets, moving around the globe with scant regard for national borders or local currencies. Their financing too is a truly international affair.
In this environment, the idea of settling on a single currency has suited manufacturers, airlines and financiers alike, bringing a measure of stability and certainty to deals wherever they happen around the world.
The US dollar was the natural choice for that standard. Over more than half a century, the dollar has established itself as the benchmark currency for world trade. For aviation the arguments are even more compelling, with the USA historically accounting for more than two thirds of jet airliner production and the lion's share of consumption.
Today, the blunt fact is that few of these assumptions are as sound as they once were, and are likely to become shakier still as the industry moves into the next century.
The US dollar is no longer stable, US airlines no longer dominate new aircraft business, and the US industry no longer controls world airliner manufacture in the way it once did.
If Europe's Airbus Industrie realises its ambitions it could be on the way towards winning a 50% share of new jet airliner orders some time in the next 10 years.
European manufacturers have been making increasingly bitter complaints about the disadvantages that they face competing with transatlantic rivals, following the collapse of the dollar.
Daimler-Benz Aerospace (DASA) warns that it may be forced to move whole swathes of production out of Germany and the Netherlands unless the dollar makes up some of its lost ground against the Deutschemark and guilder. Hopes of returning to profit have been put on hold.
Aerospatiale has followed suit with dire warnings that its gains in productivity and efficiency are simply being swallowed up by the currency gap.
Calls for state intervention have followed, raising the prospect that some of the good work towards cutting the ties between government and industry may be undone. It is only three years since Germany agreed to stop underwriting DASA's dollar losses.
Europe is not alone. Japanese industry is also struggling to make economic sense of production ventures, many of them with Boeing, which were begun before the dollar slid 20% against the yen.
The fact that non-US manufacturers are disadvantaged is not itself a cause for undue concern. US industry could rightly argue that these are facts of life. Corporate treasury departments may have to work harder, but so be it.
What is less easy to dismiss, is the potential uncertainties that a wildly fluctuating dollar is having on the customer. Technically, airlines should benefit from cheaper aircraft if their local currency rises against the dollar, but that is not how the world works.
In reality, airlines are forced to hedge against fluctuations in the dollar and as the Japanese carriers have shown, can lose vast amounts if such bets go wrong. Even if the bets go right, that is not the point.
The real value of dollar pricing has lain in the fact that it has provided the certainty and stability which any business needs in order to thrive. If that stability can no longer be guaranteed, and the risks now outvalue the benefits, then perhaps it is time for other currencies to be given a chance.
Source: Flight International
