netrashetty
Netra Shetty
The General Electric Company, or GE (NYSE: GE), is an American multinational conglomerate corporation incorporated in New York.[3] The Company operates through five segments: Energy Infrastructure, Technology Infrastructure, Capital Finance and Consumer & Industrial.[4] In 2010, Forbes ranked GE as the world's second largest company after JPMorgan Chase,[5] based on a formula that compared the total sales, profits, assets, and market value of several multinational companies.[6] The company has 287,000 employees around the world.[2]
United Kingdom: An overview of the aerospace market
The UK aerospace industry, the second largest in the world, enjoyed a turnover of $39.6 billion in 2006. This represented approximately 13% of the worldwide aerospace market. Increasing demand for both passenger and airfreight services, encouraged by the recent Open Skies agreement, is expected to fuel continued growth. "Open Skies" or the new European Union Air Transport Agreement entered into effect on March 30, 2008. As a result, U.S. and UK carriers immediately introduced 30 new flights between the U.S. and UK. In particular, Delta, Continental, US Airways, Northwest, United and American, will begin thirteen new flights to Heathrow, increasing competition, connections and choices for passengers on both sides of the Atlantic. This stimulus of the airline market has had a particularly positive impact on the maintenance, repair and overhaul sector, bringing significant benefits to the aerospace market as a whole.
This is marketing research on the Aviation or Aerospace - U.K. industry and can include information on the background, market structure, definitions, competitors, trends and developments of aviation or aerospace - U.K. and is related to other topics such as airlines and defense.
United Kingdom: An overview of the aerospace market
The UK aerospace industry, the second largest in the world, enjoyed a turnover of $39.6 billion in 2006. This represented approximately 13% of the worldwide aerospace market. Increasing demand for both passenger and airfreight services, encouraged by the recent Open Skies agreement, is expected to fuel continued growth. "Open Skies" or the new European Union Air Transport Agreement entered into effect on March 30, 2008. As a result, U.S. and UK carriers immediately introduced 30 new flights between the U.S. and UK. In particular, Delta, Continental, US Airways, Northwest, United and American, will begin thirteen new flights to Heathrow, increasing competition, connections and choices for passengers on both sides of the Atlantic. This stimulus of the airline market has had a particularly positive impact on the maintenance, repair and overhaul sector, bringing significant benefits to the aerospace market as a whole.
The United Kingdom is home to several leading manufacturers, including BAE Systems, Rolls Royce and Airbus. Defense accounts for much of this sector’s activity, driven by projects such as the Eurofighter Typhoon and the F35 Joint Strike Fighter. Global defense sales of $19.1 billion represent for just over 48% of the United Kingdom’s aerospace industry output. However, growth in the defense side of the aerospace market has been negligible in recent years as several major programs are nearing completion. Future prospects are also dampened by concerns over the equipment budget available to the Ministry of Defence. By comparison, civil aerospace turnover increased 8%, to $20.5 billion, in 2006 and is expected to continue to grow over the coming years.
U.S. manufacturers are well represented in the United Kingdom, including Honeywell, Raytheon, Rockwell Collins, Lockheed Martin and Goodrich. Transatlantic relations are considered critically important to the UK aerospace sector. According to the Society of British Aerospace Companies (SBAC), UK aerospace companies employ over 34,500 people in the United States and generate U.S. revenue of over $9.2 billion annually. Similarly, approximately one-fifth of the SBAC’s members are U.S.-owned. In 2006, U.S. companies exported $5.4 billion in aerospace products and parts to the United Kingdom, the highest level since 2001. Aircraft, propulsion, and aircraft parts comprise the great majority of these exports.
Contents
[hide]
1 Market Demand
2 Market Data
3 Best Prospects
4 Key Suppliers
5 Prospective Buyers
6 Market Entry
7 Sources
Market Demand
Aerospace is an important contributor to the UK economy, directly employing some 124,000 people nationwide. The majority of activity is concentrated in the South West, South East and North West of England. Over 2,500 small and medium-sized enterprises (SMEs) are involved in the UK aerospace industry, emphasizing the importance of the sector and its contribution to the national skills base. As one government report noted in 2003, aerospace is “second only to pharmaceuticals in terms of value added per head in the manufacturing area”. The worldwide success of UK companies such as BAE Systems and Rolls Royce further underlines the strategic significance of aerospace to the national economy. Over the past five years, much of the momentum behind the growth in UK aerospace has come from a resurgent maintenance, repair and overhaul (MRO) sector. The UK MRO market was estimated to be worth $12.3 billion in 2006, up 8% from the previous year, with aircraft manufacturers taking an increasing share of the MRO market from independent operators and the airlines. The emergence of a strong MRO sector is in part a consequence of the large number of low-cost and regional carriers throughout Europe, as well as consolidation and increased outsourcing among the larger carriers. Again, this is the result of rising demand, with passenger volume at UK airport terminals having grown 30% from 2001 to 2006. As in the United States, serious congestion has plagued major UK airports, with responses varying from increased terminal development to greater interest in executive and charter aviation.
Rising passenger numbers have in addition prompted growing concerns about the environmental impact of aviation. The UK’s Sustainable Aviation strategy, based on a partnership between government and ndustry, is considered a pioneering approach in this area. With growing public concern over the ‘carbon footprint’ generated by air travel, government-backed research, including the Environmentally Friendly Engine program, demonstrates an emerging demand for greater aircraft efficiency and low-emission technologies.
Market Data
The United Kingdom’s aerospace industry is the second largest in the world with a turnover in 2006 of $39.6 billion, equivalent to around 13% of the worldwide aerospace market. Defense-related sales to customers in the United Kingdom and overseas accounted for $19.1 billion or 48% of total UK aerospace revenues, although there has been only limited overall growth in the defense market in recent years. UK industry is increasingly export-oriented, and no less than 63% of aerospace sales in 2006 were export-related.
These sales generated export revenues of $24.9 billion and over one-fifth were destined for the United States, the industry’s second-largest export customer after the European Union. UK aerospace sales to the U.S. totaled $8.1 billion in 2006. The U.S. is also by far the single largest source of aerospace imports into the United Kingdom. In 2006, U.S. companies exported $5.4 billion in aerospace products and parts to the United Kingdom. Also, exports of both light aircraft and helicopters increased ignificantly over the 2005-2006 period (the latest year for which complete figures are available).
U.S. Aerospace Exports to the U.K.
U.S. Exports to the UK 2006 ($ Million) % of Total
Aircraft Engine Parts $1,680,393 31
Aircraft Parts $1,630,523 30
Aircraft $970,122 18
Engines $802,930 15
Guided Missiles & Parts $241,930 5
Trainers & Simulators $38,554 0.7
Other Aerospace $10,900 0.2
Total $5,375,351
Source: U.S. Department of Commerce / U.S. International Trade Commission
Best Prospects
Broadly speaking, the UK aerospace industry can be divided into five sectors: aircraft systems and frames (31% of turnover); aircraft equipment (28%); aircraft engines (24%); missiles (6%); and space (3%). Aircraft maintenance accounted for a further 8% of industry sales in 2006. Within these sectors, the United Kingdom is home to some of the world’s leading manufacturers of aircraft engines, avionics, and specialized products such as in-flight refueling systems, safety systems and ejector seats.
While the United Kingdom does not produce whole civil aircraft, the development of airframe sections and major components, including those for the Airbus A380 and A350, create opportunities for aircraft equipment suppliers. UK firms have significant involvement in both programs, as well as the Boeing 787. The Bombardier C Series also potentially includes substantial UK content, sourced from the firm’s Belfast plant, though the future of this design remains under review by the company. Some of the work on these projects reflects a growing expertise in composites and specialist materials, an area the UK government has determined as key to the future competitiveness of the industry. Airbus has made major investments in composites manufacturing at its Broughton and Filton facilities, partly funded by the UK government and regional bodies. The Filton plant, however, is now a GKN facility, having been sold by Airbus because of the Power 8 restructuring program.
The Aerospace Innovation and Growth Team (AeIGT), a joint government and industry initiative, has identified engine technology as a key prospect for the United Kingdom. The importance of propulsion has also been underlined by the launch of a Sustainable Aviation strategy for the United Kingdom, which was also endorsed by government and private industry. The strategy highlights the increasing importance of the environment in aviation policy, and is the result of the rapid growth in UK air travel, involving both established airlines and, perhaps more importantly, a proliferation of charter airlines and low-cost carriers. Sustainable Aviation establishes specific targets for the reduction of engine emissions over the period to 2020, and additionally aims to promote the use of low-noise procedures by airlines. It is also closely related to the forthcoming extension of the European Union Emissions Trading Scheme (EU ETS) to aviation.
Airport development remains a further important trend within the UK aerospace sector. Airport expansion programs have been closely linked to the growth of both low cost carriers and a number of new regional airlines, serving routes both in the United Kingdom and Europe. Major capital investment is underway at most UK airports, with the expansion of facilities originally identified as a priority in a 2003 UK Government White Paper. Airports operator BAA plans to spend approximately $19 billion over the next ten years on London Heathrow, London Gatwick, and Stansted airports. The first phase of the new Terminal 5 at Heathrow opened in March 2008, after which BAA will press ahead with the development of a new ‘Terminal East’ to replace the ageing Terminal 2 at Heathrow, and which is expected to open in late 2012. BAA investment currently excludes funding for a possible third runway at Heathrow, potentially to be built by 2020, subject to planning and environmental approval. An additional $79 million has also been pledged by BAA to add security-screening capacity and reduce congestion at its seven UK airports, ahead of the 2012 Olympics.
Share of Passengers at All UK Airports
2001 2006 Change
Major London airports 62.6% 58.2% - 4.4%
UK regional airports 33.5% 40.6% + 7.1%
Aerodromes, airfields 3.9% 1.2% - 2.7%
Source: CAA
Major London airports’ comprise Heathrow, Gatwick, Stansted, Luton and London City As indicated above, the United Kingdom’s largest airports, situated around London, have in recent years lost market share to a number of emerging regional airports. This trend has primarily been driven by the advent of low-cost carriers and charter airlines. Between 2001 and 2006, some of the largest increases in terminal passenger figures have taken place in Bristol, Liverpool, Exeter, Southampton and Bournemouth. Equally, there has been notable growth among scheduled regional carriers, following British Airways’ (BA) disposal of many of its domestic routes, including the March 2007 sale of BA Connect’s UK and European regional network to FlyBe. A further development has been the emergence of all business class or ‘premium’ airlines such as Silverjet, with British Airways having plans to introduce its own premium routes in 2009. This has been repeated elsewhere in Europe, including in France and Germany, although the demise of Maxjet in late 2007 and EOS in April 2008 have sounded a note of caution for this new segment of the market.
Further, significant changes are anticipated in long-haul transatlantic travel, following the agreement of a new ‘Open Skies’ accord between the United States and the European Union. In particular, this has placed renewed emphasis on competition for slots at Heathrow. As a result, new alliances, mergers and acquisitions amongst the major airlines are expected, as companies seek to try and take advantage of the new agreement. Over 30 new routes have been announced by all major U.S. carriers, starting on March 30, 2008, when the Open Skies agreement enters effect. British Airways has gone further, launching an entirely new venture called ‘Open Skies’, operating from Paris and potentially Brussels, in addition to its expanded services at London Heathrow. The Open Skies agreement will, however, present logistical challenges at Heathrow, especially regarding fuel availability.
Prior to the Open Skies accord, BA announced in February 2007 that for the first time in several years it intends to buy new long-haul aircraft. Initially, BA will acquire four Boeing 777-200ER aircraft, for delivery in early 2009, and has options for the delivery of a further four the following year. In December 2007, BA also confirmed that it would replace a large proportion of its existing Boeing 747-400 and 767-300ER fleet with the purchase of 24 Boeing 787 aircraft, plus 18 options. Delivery is in the 2012-2014 timeframe, and the equipment will be equipped with Rolls-Royce engines. BA will also buy 12 Airbus A380s, plus seven options.
A second phase of the acquisition program is expected to be announced in late 2008, and is anticipated to involve competition between the Boeing 777 and the Airbus A350XWB. Another important recent change has been the increased funding in aerospace research and development. Public and private sector research spending fell slightly from 2005 to 2006, to a reported $5.1 billion, with two-thirds of R&D activity occurring in the defense sector. The National Aerospace Technology Strategy (NATS) of 2004 provides a framework for research. Aerospace has to date received greater funding from the government’s technology program than any other industry sector, though there remains concern that aerospace research no longer has a separate funding line from the Department of Business, Environment and Regulatory Reform (BERR), as was previously the case under the Civil Aircraft and Technology Demonstration (CARAD) initiative. NATS established a series of Aerospace Innovation Networks to coordinate government, industry and academic research in areas considered critical to the future of the UK aerospace industry. Funded at national and regional levels, these areas include:
Aerodynamics and Computational Fluid Dynamics (CFD)
Environmental technology
Advanced aerospace materials and structures
Health management and prognostics
Through-life support
Synthetic environments and systems simulation
Separately, the government has also launched a number of Aerospace Technology Validation Programs (ATVPs) to look specifically at risk-reduction in the following technology areas:
Civil Powered Wing
Environmentally Friendly Engine
More Electric Aircraft
Autonomous systems
Future air battlespace
Air traffic management
Skill development programs by BERR and SBAC have targeted areas such as advanced materials engineering, software systems, modeling and simulation, in both the civil and defense sectors. Additionally, the focus on the future air battlespace is indicative of a substantial commitment by the Ministry of Defence to achieve Network Enabled Capability (NEC), generating potential prospects for U.S. companies with technologies for Command & Control, as well as Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR).
United Kingdom: An overview of the aerospace market
The UK aerospace industry, the second largest in the world, enjoyed a turnover of $39.6 billion in 2006. This represented approximately 13% of the worldwide aerospace market. Increasing demand for both passenger and airfreight services, encouraged by the recent Open Skies agreement, is expected to fuel continued growth. "Open Skies" or the new European Union Air Transport Agreement entered into effect on March 30, 2008. As a result, U.S. and UK carriers immediately introduced 30 new flights between the U.S. and UK. In particular, Delta, Continental, US Airways, Northwest, United and American, will begin thirteen new flights to Heathrow, increasing competition, connections and choices for passengers on both sides of the Atlantic. This stimulus of the airline market has had a particularly positive impact on the maintenance, repair and overhaul sector, bringing significant benefits to the aerospace market as a whole.
This is marketing research on the Aviation or Aerospace - U.K. industry and can include information on the background, market structure, definitions, competitors, trends and developments of aviation or aerospace - U.K. and is related to other topics such as airlines and defense.
United Kingdom: An overview of the aerospace market
The UK aerospace industry, the second largest in the world, enjoyed a turnover of $39.6 billion in 2006. This represented approximately 13% of the worldwide aerospace market. Increasing demand for both passenger and airfreight services, encouraged by the recent Open Skies agreement, is expected to fuel continued growth. "Open Skies" or the new European Union Air Transport Agreement entered into effect on March 30, 2008. As a result, U.S. and UK carriers immediately introduced 30 new flights between the U.S. and UK. In particular, Delta, Continental, US Airways, Northwest, United and American, will begin thirteen new flights to Heathrow, increasing competition, connections and choices for passengers on both sides of the Atlantic. This stimulus of the airline market has had a particularly positive impact on the maintenance, repair and overhaul sector, bringing significant benefits to the aerospace market as a whole.
The United Kingdom is home to several leading manufacturers, including BAE Systems, Rolls Royce and Airbus. Defense accounts for much of this sector’s activity, driven by projects such as the Eurofighter Typhoon and the F35 Joint Strike Fighter. Global defense sales of $19.1 billion represent for just over 48% of the United Kingdom’s aerospace industry output. However, growth in the defense side of the aerospace market has been negligible in recent years as several major programs are nearing completion. Future prospects are also dampened by concerns over the equipment budget available to the Ministry of Defence. By comparison, civil aerospace turnover increased 8%, to $20.5 billion, in 2006 and is expected to continue to grow over the coming years.
U.S. manufacturers are well represented in the United Kingdom, including Honeywell, Raytheon, Rockwell Collins, Lockheed Martin and Goodrich. Transatlantic relations are considered critically important to the UK aerospace sector. According to the Society of British Aerospace Companies (SBAC), UK aerospace companies employ over 34,500 people in the United States and generate U.S. revenue of over $9.2 billion annually. Similarly, approximately one-fifth of the SBAC’s members are U.S.-owned. In 2006, U.S. companies exported $5.4 billion in aerospace products and parts to the United Kingdom, the highest level since 2001. Aircraft, propulsion, and aircraft parts comprise the great majority of these exports.
Contents
[hide]
1 Market Demand
2 Market Data
3 Best Prospects
4 Key Suppliers
5 Prospective Buyers
6 Market Entry
7 Sources
Market Demand
Aerospace is an important contributor to the UK economy, directly employing some 124,000 people nationwide. The majority of activity is concentrated in the South West, South East and North West of England. Over 2,500 small and medium-sized enterprises (SMEs) are involved in the UK aerospace industry, emphasizing the importance of the sector and its contribution to the national skills base. As one government report noted in 2003, aerospace is “second only to pharmaceuticals in terms of value added per head in the manufacturing area”. The worldwide success of UK companies such as BAE Systems and Rolls Royce further underlines the strategic significance of aerospace to the national economy. Over the past five years, much of the momentum behind the growth in UK aerospace has come from a resurgent maintenance, repair and overhaul (MRO) sector. The UK MRO market was estimated to be worth $12.3 billion in 2006, up 8% from the previous year, with aircraft manufacturers taking an increasing share of the MRO market from independent operators and the airlines. The emergence of a strong MRO sector is in part a consequence of the large number of low-cost and regional carriers throughout Europe, as well as consolidation and increased outsourcing among the larger carriers. Again, this is the result of rising demand, with passenger volume at UK airport terminals having grown 30% from 2001 to 2006. As in the United States, serious congestion has plagued major UK airports, with responses varying from increased terminal development to greater interest in executive and charter aviation.
Rising passenger numbers have in addition prompted growing concerns about the environmental impact of aviation. The UK’s Sustainable Aviation strategy, based on a partnership between government and ndustry, is considered a pioneering approach in this area. With growing public concern over the ‘carbon footprint’ generated by air travel, government-backed research, including the Environmentally Friendly Engine program, demonstrates an emerging demand for greater aircraft efficiency and low-emission technologies.
Market Data
The United Kingdom’s aerospace industry is the second largest in the world with a turnover in 2006 of $39.6 billion, equivalent to around 13% of the worldwide aerospace market. Defense-related sales to customers in the United Kingdom and overseas accounted for $19.1 billion or 48% of total UK aerospace revenues, although there has been only limited overall growth in the defense market in recent years. UK industry is increasingly export-oriented, and no less than 63% of aerospace sales in 2006 were export-related.
These sales generated export revenues of $24.9 billion and over one-fifth were destined for the United States, the industry’s second-largest export customer after the European Union. UK aerospace sales to the U.S. totaled $8.1 billion in 2006. The U.S. is also by far the single largest source of aerospace imports into the United Kingdom. In 2006, U.S. companies exported $5.4 billion in aerospace products and parts to the United Kingdom. Also, exports of both light aircraft and helicopters increased ignificantly over the 2005-2006 period (the latest year for which complete figures are available).
U.S. Aerospace Exports to the U.K.
U.S. Exports to the UK 2006 ($ Million) % of Total
Aircraft Engine Parts $1,680,393 31
Aircraft Parts $1,630,523 30
Aircraft $970,122 18
Engines $802,930 15
Guided Missiles & Parts $241,930 5
Trainers & Simulators $38,554 0.7
Other Aerospace $10,900 0.2
Total $5,375,351
Source: U.S. Department of Commerce / U.S. International Trade Commission
Best Prospects
Broadly speaking, the UK aerospace industry can be divided into five sectors: aircraft systems and frames (31% of turnover); aircraft equipment (28%); aircraft engines (24%); missiles (6%); and space (3%). Aircraft maintenance accounted for a further 8% of industry sales in 2006. Within these sectors, the United Kingdom is home to some of the world’s leading manufacturers of aircraft engines, avionics, and specialized products such as in-flight refueling systems, safety systems and ejector seats.
While the United Kingdom does not produce whole civil aircraft, the development of airframe sections and major components, including those for the Airbus A380 and A350, create opportunities for aircraft equipment suppliers. UK firms have significant involvement in both programs, as well as the Boeing 787. The Bombardier C Series also potentially includes substantial UK content, sourced from the firm’s Belfast plant, though the future of this design remains under review by the company. Some of the work on these projects reflects a growing expertise in composites and specialist materials, an area the UK government has determined as key to the future competitiveness of the industry. Airbus has made major investments in composites manufacturing at its Broughton and Filton facilities, partly funded by the UK government and regional bodies. The Filton plant, however, is now a GKN facility, having been sold by Airbus because of the Power 8 restructuring program.
The Aerospace Innovation and Growth Team (AeIGT), a joint government and industry initiative, has identified engine technology as a key prospect for the United Kingdom. The importance of propulsion has also been underlined by the launch of a Sustainable Aviation strategy for the United Kingdom, which was also endorsed by government and private industry. The strategy highlights the increasing importance of the environment in aviation policy, and is the result of the rapid growth in UK air travel, involving both established airlines and, perhaps more importantly, a proliferation of charter airlines and low-cost carriers. Sustainable Aviation establishes specific targets for the reduction of engine emissions over the period to 2020, and additionally aims to promote the use of low-noise procedures by airlines. It is also closely related to the forthcoming extension of the European Union Emissions Trading Scheme (EU ETS) to aviation.
Airport development remains a further important trend within the UK aerospace sector. Airport expansion programs have been closely linked to the growth of both low cost carriers and a number of new regional airlines, serving routes both in the United Kingdom and Europe. Major capital investment is underway at most UK airports, with the expansion of facilities originally identified as a priority in a 2003 UK Government White Paper. Airports operator BAA plans to spend approximately $19 billion over the next ten years on London Heathrow, London Gatwick, and Stansted airports. The first phase of the new Terminal 5 at Heathrow opened in March 2008, after which BAA will press ahead with the development of a new ‘Terminal East’ to replace the ageing Terminal 2 at Heathrow, and which is expected to open in late 2012. BAA investment currently excludes funding for a possible third runway at Heathrow, potentially to be built by 2020, subject to planning and environmental approval. An additional $79 million has also been pledged by BAA to add security-screening capacity and reduce congestion at its seven UK airports, ahead of the 2012 Olympics.
Share of Passengers at All UK Airports
2001 2006 Change
Major London airports 62.6% 58.2% - 4.4%
UK regional airports 33.5% 40.6% + 7.1%
Aerodromes, airfields 3.9% 1.2% - 2.7%
Source: CAA
Major London airports’ comprise Heathrow, Gatwick, Stansted, Luton and London City As indicated above, the United Kingdom’s largest airports, situated around London, have in recent years lost market share to a number of emerging regional airports. This trend has primarily been driven by the advent of low-cost carriers and charter airlines. Between 2001 and 2006, some of the largest increases in terminal passenger figures have taken place in Bristol, Liverpool, Exeter, Southampton and Bournemouth. Equally, there has been notable growth among scheduled regional carriers, following British Airways’ (BA) disposal of many of its domestic routes, including the March 2007 sale of BA Connect’s UK and European regional network to FlyBe. A further development has been the emergence of all business class or ‘premium’ airlines such as Silverjet, with British Airways having plans to introduce its own premium routes in 2009. This has been repeated elsewhere in Europe, including in France and Germany, although the demise of Maxjet in late 2007 and EOS in April 2008 have sounded a note of caution for this new segment of the market.
Further, significant changes are anticipated in long-haul transatlantic travel, following the agreement of a new ‘Open Skies’ accord between the United States and the European Union. In particular, this has placed renewed emphasis on competition for slots at Heathrow. As a result, new alliances, mergers and acquisitions amongst the major airlines are expected, as companies seek to try and take advantage of the new agreement. Over 30 new routes have been announced by all major U.S. carriers, starting on March 30, 2008, when the Open Skies agreement enters effect. British Airways has gone further, launching an entirely new venture called ‘Open Skies’, operating from Paris and potentially Brussels, in addition to its expanded services at London Heathrow. The Open Skies agreement will, however, present logistical challenges at Heathrow, especially regarding fuel availability.
Prior to the Open Skies accord, BA announced in February 2007 that for the first time in several years it intends to buy new long-haul aircraft. Initially, BA will acquire four Boeing 777-200ER aircraft, for delivery in early 2009, and has options for the delivery of a further four the following year. In December 2007, BA also confirmed that it would replace a large proportion of its existing Boeing 747-400 and 767-300ER fleet with the purchase of 24 Boeing 787 aircraft, plus 18 options. Delivery is in the 2012-2014 timeframe, and the equipment will be equipped with Rolls-Royce engines. BA will also buy 12 Airbus A380s, plus seven options.
A second phase of the acquisition program is expected to be announced in late 2008, and is anticipated to involve competition between the Boeing 777 and the Airbus A350XWB. Another important recent change has been the increased funding in aerospace research and development. Public and private sector research spending fell slightly from 2005 to 2006, to a reported $5.1 billion, with two-thirds of R&D activity occurring in the defense sector. The National Aerospace Technology Strategy (NATS) of 2004 provides a framework for research. Aerospace has to date received greater funding from the government’s technology program than any other industry sector, though there remains concern that aerospace research no longer has a separate funding line from the Department of Business, Environment and Regulatory Reform (BERR), as was previously the case under the Civil Aircraft and Technology Demonstration (CARAD) initiative. NATS established a series of Aerospace Innovation Networks to coordinate government, industry and academic research in areas considered critical to the future of the UK aerospace industry. Funded at national and regional levels, these areas include:
Aerodynamics and Computational Fluid Dynamics (CFD)
Environmental technology
Advanced aerospace materials and structures
Health management and prognostics
Through-life support
Synthetic environments and systems simulation
Separately, the government has also launched a number of Aerospace Technology Validation Programs (ATVPs) to look specifically at risk-reduction in the following technology areas:
Civil Powered Wing
Environmentally Friendly Engine
More Electric Aircraft
Autonomous systems
Future air battlespace
Air traffic management
Skill development programs by BERR and SBAC have targeted areas such as advanced materials engineering, software systems, modeling and simulation, in both the civil and defense sectors. Additionally, the focus on the future air battlespace is indicative of a substantial commitment by the Ministry of Defence to achieve Network Enabled Capability (NEC), generating potential prospects for U.S. companies with technologies for Command & Control, as well as Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR).
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