European aerospace weathered stormy economic times in 2002 to register its second most robust performance ever, according to the latest industry figures. Nonetheless, industry umbrella group AECMA recommends European governments should invest more in R&D and technology purchases in order to close the gap in the transatlantic space race.

For the first time since the mid-1990s, Europe’s aerospace industry lost ground in 2002, according to the latest figures released by the European Association of Aerospace Industries (AECMA).

This was mainly due to the knock-back effects of the battering taken by the commercial airline industry – a crucial European aerospace customer – in the wake of the 11 September attacks in the United States, as well as a more general economic slow down. Turnover among aerospace firms dropped by 9%, to €75 billion, in 2002 over the previous year. Similarly, employment levels fell by 6%, to 407 000, in the same period.

Silver lining

Despite the temporary slip in fortunes, AECMA struck an upbeat chord: in these tough economic times, there is a silver lining in that this was the second best financial year ever for Europe aerospace industry. “Overall, the operating profit margin was around 5%, which gives reason for confidence in the performance of our industry,” AECMA President Bengt Halse said in a statement.

The industry has more than €300 billion of orders on the books, which should keep it buoyant for at least another four years. The combined exports of the civil, defence and space sectors stood at a healthy 53% of turnover.

Nevertheless, Halse sounded a note of caution over the European industry’s dependence on the civil aviation sector, which accounted for nearly 70% of the industry’s turnover. “Basically, the aerospace industry stands on two legs – civil and defence – and it requires both to be successful [and] competitive.”

Reaching for the stars

In addition to investing in defence initiatives – including a European armaments, research and defence agency as recommended by the Convention on the Future of Europe – AECMA suggests that the EU needs to dig deeper into its coffers in order to venture further into space.

“Our industry is highly exposed to the cyclical [nature of] commercial orders. Europe is lacking an institutional market. In the US, the government market for space business is six times that of Europe,” Halse said.

While commending recent progress on Europe’s satellite navigation system Galileo and the Commission’s Green Paper on Space, Halse stressed that: “a real, unified, space policy is urgently needed in Europe”.

This would involve more government spending on space technology and greater public R&D expenditure in the sector. “If we want to compete with the USA on a level playing field, equivalent institutional investment must be available in Europe,” the AECMA president maintained.

For more information:
AECMA facts and figures