AEROSPACE Facts and Figures 1 887-88 $14.95 Compiled by Economic Data Service Aerospace Research Center Aerospace Industries Association of America, Inc. 1250 Eye Street, N.W., Washington D.C., 20005 (202) 371-8400 Director, Research Center: Virginia C. Lopez Manager, Economic Data Service: Carl M. Pascale Editorial Consultant: James J. Haggerty Design: Executive Graphic Services Published by Aviation Week & Space Techno 'ogy A McGraw-Hill Publication 1221 Avenue of the Americas New York, N.Y. 10020 1-800-433-0880 Copyright, October 1987 by Aerospace Industries Association of America, Inc. Library of Congress Catalog No. 46-25007 Acknovvledgrnents Air Transport Association of America Council of Economic Advisers Export-Import Bank of the United States Exxon International Company General Aviation Manufacturers Association International Air Transport Association International Civil Aviation Organization McGraw-Hill Publications Company National Aeronautics and Space Administration National Science Foundation Office of Management and Budget Price Waterhouse U.S. Departments of Commerce (Bureau of the Census, Bureau of Economic Analysis, International Trade Administration) Defense (Comptroller; Directorate for Information, Operations and Reports: Army, Navy, Air Force) Labor (Bureau of Labor Statistics) Transportation (Federal Aviation Administration) For aerospace scientists and engineers, what is impossi­ ble today is achievable tomorrow. They move us into the future-from concept to reality-with a vision of what we can do, where we might go, and how to get there. A National Aerospace Plane, a space station, a manned mis­ sion to Mars-all begin with a technically feasible id~a that requires stretching a myriad of techno log. es to their fullest. Years of development in every technical as~ct of flight and years of prototype demonstration and testmg precede the reality of a new aerospace sy~tem. But pro­ gress begins with a concept, with a possible dream. ----------------- ~ Contents Foreword 6 Aerospace Summary B Aircraft Production 26 Missile Programs 48 Space Programs 58 Air Transportation 78 Helicopter Transportation 1 DO Research and Development 1 DB Foreign Trade 1 22 Employment 1 42 Finance 158 Glossary 1 68 Index 174 For the U.S. aerospace industry, 1986 was a year of contradiction. It was a year in which sales and backlog reached record levels, a year of impressive performance in the international marketplace, a year of solid accomplishment in product. manufacture and development- but a disquieting year in that profits continued to decline at a time of heightened activity, prompting serious concern for the industry's financihl ture. • Overall s es · creased by more than seven percent over the illflation rate and backlog grew b a moderate 3.7 percent. Those gains, ewever, are tempered by the fact that, for the 1 t e in more than a decade, the flow of new o r ell below the previous year's eve!, evidencmg · pact of negative-growth defense buCigets of, ecent years. This impact which had been anticip ted , does not signal~ immediate plunge in defense prOduction, but rather a flattening of what had been a consis­ 1 tently rising military sales curve. Perhaps the performance highlight of the year was the industry's impressive showing in in­ ternational trade. At a time when the United States experienc · the worst trade deficit in its t history, the aerospace industry generated its greatest-ever v I of export sales and a solid trade surplu ubstantially offset the adverse impact of erican losses in other catego~es of trade. 1s underscored once more the un- portance to the U.S. economy of high v~ue , high technology aerospace expo~~ provtded gratl- ~· ng testimony .to the continumg foreign accep ce of Amencan aerospace products. sales and export accomplishments were overshadowed by the lowes~ in more than a decade. In each of years, aerospace profit- as a oeJrcCIBtaJ~~ of sales- has dropped below the s level and in each of those years aerostJill!:re profit rate was sharply below the U.S. manufacturing industries. a matter of particular concern hl~Ul - lteQ IIJ D<>lOJn industry whose capital 6 investment requirements are of exceptional order. The profit decline is due in substantial degree to a number of legislative and regulatory reforms instituted by the Congress and the Department of Defense. The industry is seeking modification of these reforms. It is customary to attempt, in this annual foreword, a forecast of industry business levels in future years. This year there is a greater than usual array of uncertainties and one can assay future activity only in the most general terms. The record backlog suggests that the aerospace industry will have substantial activity in its three main workload areas-defense, space and commercial aircraft-for the remain­ der of the decade. But the reduced flow of orders suggests a leveling of the sales curve rather than continued growth. Beyond that, several surveys agree that there will be a very large market for commercial transports through the end of the century. The question is how much of the market can U.S. manufacturers capture in the face of the still­ intensifying competition from abroad. If the U.S. can retain its current share, the industry's commercial airplane workload should remain at a high level. Since defense and space programs are largely government-financed, and since the need to reduce the national deficit may even more sharply impact those programs in future years, the picture for the 1990s is very misty. I feel intuitively that the American people will con­ tinue to support a strong national defense and a progressive space program and that there will be vigorous industry activity in these areas in the 1990s-but I would not attempt to assign dollar-value levels to such activity. We have, in recent years, substantially improved the format and content of Aerospace Facts and Figures to make it more useful and informative. I trust that this 35th edition will meet with the wide acceptance enjoyed by its predecessors. Don Fuqua President Aerospace Industries Association 7 R~rting gains in all sales categories, the erospace industry recorded its highest-ever level of ales in 1986 and a real , inflation­ adjusted increase of more than seven percent. But the encouraging performance in sales Aerospace Burn a ry volume was offset by continuing decline in the industry's profit rate, which dipped to its lowest Level in more than a decade. Here is a breakdown of the industry's per­ formance in 1986: Sales. Total sales amounted to $105 billion, un from $96.6 billion in 1985. As is customary, sales of · craft predominated in the breakdown by product group, representing well over half the total ·sales olume. Aircraft sales to $55.4 billion, eom}lared with · the previous year. Sales of space systems once again ranked se­ cond among the product categories, marking the fourth straight year of that trend. Space sales a ounted to $20. L billion, om 18 6 . illion an in rease of eight percent. Increas wer also recorded in missiles (up more than $500 million to $12 billion) and in the "related ~!!~~-;;products and services" grouping (up $1.4 billion to $17.5 billion). Aerospace sales represented 2.5 percent of the Gross National Product and 4.6 percent of total sales by U.S. manufacturing industries. The comparable figures for 1985 were 2.4 and 4.2 percent respectively. Earnings. The industry recorded a net pro­ fit after taxes of $3.1 billion, which was ap­ proximately $180 million below the L985level and more than $500 million below 1984. In percentage \erms-whether measured as a percentage .ales, assets or equity-the 1986 profit rate was well below that of the previous year. As a percentage of sales, it was 2.8 per­ cent, down from 3.1 percent. Expressed in equity terms, the aerospace profit was 9.4 percent, down from 11.1 percent, and as a 8 percentage of assets it was 3.0 percent, down obligational authority: the government backlog from 3. 5 percent. In all three cases, the for aircraft was $3 7. 0 billion (down $1.2 aerospace figures were lower than the billion) and the non-government backlog­ comparable average for all U.S. manufactur­ largely orders for airline transports-was $39.4 ing industries. billion (up $1.4 billion). Orders and Backlog. For the first time in Civil Aircraft Production. In 1986, the in­ more than a decade, the flow of new orders fell dustry produced the lowest number of civil air­ below the previous year's level; at $111 billion, craft in more than 30 years, yet sales in dollar orders reported were $132 million below the terms increased substantially; the obvious 1985 figure. The decline was entirely due to reason is that production emphasis was on the a reduced level of orders from the government, higher value commercial transports, while sales more than $2 billion less than was recorded in of general aviation aircraft declined once again. 1985. Non-government orders increased The industry turned out 2,151 civil aircraft, moderately, but not enough to offset the drop down from 2,683 in 1985 and less than one­ in government orders. This decline was the first eighth the number produced in the peak year evidence of the anticipated impact of two con­ (18,962 in 1978). The numerical decline was secutive negative-growth defense budgets. due largely to continuing depressed activity in Despite the decline, backlog at yearend reach­ the general aviation sector (down from 2,029 ed a new record of $148.2 billion, up from units in 1985 to 1 ,495 in 1986). There was also $143.0 billion at yearend 1985. The 1986 a drop in helicopter production (down from 376 backlog included $95.0 billion in government to 326).