Outlook upbeat for aerospace industry

10/09/2012 11:57 AM

10/09/2012 6:39 PM

The world aviation industry will continue to grow in the coming decades, creating business opportunities for the North Texas economy, speakers said Monday at an industry conference in Fort Worth.

In the short term, weak economic conditions and looming budget cuts in Washington pose problems for some parts of the industry. But the bigger message at the Aviation and Aerospace Industry Manufacturing Summit was that world economic growth will lead to growing sales of new airliners, helicopters and business jets for years to come.

The conference is being sponsored by Embry Riddle Aeronautical University and its Center for Aviation and Aerospace Leadership, with the backing of Hillwood and its AllianceTexas development.

Global growth presents potential sales for companies that manufacture components and provide services to companies like Boeing and Airbus, as well as operators of commercial helicopters and private jets.

Examples abound. NetJets, the leading provider of fractional jet ownership services, has announced plans to spend $17.5 billion over the next decade to buy hundreds of new aircraft, said Michael Goode, senior vice president of NetJets, which is owned by Warren Buffett's Berkshire Hathaway.

The continued consolidation of commercial airlines, reduced service and declining quality will drive more business people to use private aircraft, Goode said.

One beneficiary of NetJets spending will be Canadian manufacturer Bombardier, which has operations in Dallas-Fort Worth and is contracting with Triumph Aerostructures in Dallas to build wings for its newest jets.

Similarly, American Eurocopter's chief executive, Mark Paganini, said helicopter sales in the U.S. and worldwide should grow substantially over the next decade due to new technology, economic growth and as Vietnam-era copters need to be replaced.

"We are optimistic the business will continue to grow. Our main challenge today is to ramp up our capacity to produce," said Paganini, who leads the Grand Prairie-based company. Finding new, talented engineers, Paganini said, "is the most challenging job we have."

And despite the turmoil surrounding the airline industry, Boeing predicts air travel will roughly double in the next 20 years -- as it has over the last 20, said Jim Bowden, Boeing's regional director of market forecasting.

Boeing projects airlines will buy 34,000 airplanes worth $4.5 trillion over that time, straining the capacity of manufacturers and their suppliers, a number of whom are based in Dallas-Fort Worth.

Ross Perot, chief executive of Hillwood/Alliance, said there is ample reason to think the aviation and aerospace industries will grow in North Texas.

"I think our best years are ahead of us at Alliance," Perot said of the massive development centered on Alliance Airport.

Perot said the challenge facing the Texas aviation industry and state and local governments is how to educate and train a high quality workforce to augment and succeed those now in the field.

The one dark cloud immediately facing defense companies like Lockheed Martin, Bell Helicopter and others in the region is the threat of billions of dollars in across-the-board defense spending cuts in Congress doesn't act by the first of the year to stop budget sequestration and mandatory cuts.

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