Association tells governments they must increase spending to preserve competitiveness of continent's industry
European governments must increase research spending and draw up "coherent policies" for the defence and space sectors to safeguard the competitiveness of the continent's aerospace industry, says AeroSpace and Defence Industries Association of Europe (ASD) president Mike Turner.
ASD, representing more than 800 companies in 20 countries, was formed earlier this year through the merger of industry associations AECMA (aerospace), EDIG (defence) and Eurospace (space). Last week it revealed figures for 2003 showing that the civil aerospace market is "slowly stabilising". However, Turner, who is also BAE Systems' chief executive, says defence procurement budgets in Europe remain "too low".
Europe's aerospace industry turned over €74 billion ($89.8 billion) in 2003 - down almost 1% on 2002. The civil sector fell by 7% because of the economic downturn, but defence sales climbed 13%, to 35% of the total, a level that has not been seen since 1999.
However member states continue to seek defence cuts. "It's all very well having a peace dividend, but there is no peace," says Turner.
The European Union achieved a trade surplus in aerospace products worth €2.2 billion in 2003, compared with a small deficit in 2002. Order intake was 1.4 times unconsolidated turnover, compared with a 99% ratio in 2002. European industry can therefore "look forward to the immediate future with more confidence", says Turner.
Operating profit margin for the industry was 5.3% in 2003, up from 4.6% the year before, but still short of the 6.8% that was achieved in 1998-9.
The space sector continued to suffer minimal orders for commercial satellites, and revenues in 2003 fell below those achieved in 1995-6. Turner says ASD welcomes the EU Commission's intention to propose a dedicated space budget and increase the institutional space budget 30% by 2007.
The creation of the European Defence Agency is a "significant step forward", he says, but "there is a risk that the agency might fall short of its political ambitions and industry's expectations". Turner cites "complexity of the decision-making process" and "lack of resources for research and technology" as major concerns.
Turner says action must be taken to address Europe's "inadequate" air traffic management system.
ANDREW DOYLE / LONDON
Source: Flight International
