December 18, 1997

More aerospace sales going to non-U.S. government buyers

By JOHN DIAMOND
Associated Press Writer

WASHINGTON (AP) -- With commercial aircraft sales surging and Pentagon spending flat, the U.S. aerospace industry this year sold as much to commercial and foreign buyers as to the U.S. government.

It was only the second time that U.S. government orders did not predominate the aerospace business, Don Fuqua, president of the Aerospace Industries Association, said at a luncheon Wednesday.

"This year we are at the crossover point in the industry's long transition from a workload pattern driven by government contracts to one driven primarily by commercial sales," Fuqua said. "While the direction of our industry has been clear for some time, the crossover brings with it a faint touch of cultural shock as we pass a significant milestone."

The shift, reflected in sales by such companies as Boeing, TRW, Northrop Grumman, Raytheon and United Technologies, stems as much from a booming commercial airline sector as from waning Pentagon purchases.

Aerospace sales to commercial customers and foreign governments are expected to increase 27 percent this year to $53.9 billion. Sales to the U.S. government -- primarily the Pentagon and NASA -- will total $54.1 billion.

The Aerospace Industries Association, which represents U.S. makers of commercial, military and business aircraft, helicopters, aircraft engines, missiles, spacecraft and related components, said in a press release that non-U.S. government sales are rising "because the airline industry is booming." Both passenger and freight traffic has been increasing worldwide since 1993 and the trend is expected to continue.

Fuqua said the U.S. government share of industry sales is expected to drop from 50 percent this year to 45 percent next year.

"That trend will continue far into the 21st century," Fuqua said.