Military Aerospace Sales Flat in 2014

Total military aerospace sales were flat in Fiscal 2014, at $87.3 billion, reported the Aerospace Industries Association on Dec. 17. Space spending saw the biggest increase, rising $2.6 billion to $48.8 billion, while aircraft sales saw a marginal 0.8 percent increase, rising $420 million to $52.6 billion in 2014, reported AIA. At the same time, missile sales dropped 4.1 percent to $19.9 billion. As military exports continue to play a critical role in the industry’s profit margin, AIA found “strong growth of 9.2 percent in defense exports,” according to the year-end review and forecast. However, if sequestration-level funding returns in Fiscal 2016, the group projects the following cutbacks between by 2019: reducing one F-35 squadron, eliminating the KC-10 fleet, divesting the Global Hawk Block 40 fleet, divesting the Predator fleet, eliminating planned MQ-9 Reaper purchases in Fiscal 2018 and 2019, and taking $16 billion away from readiness accounts (including approximately $9 billion in depot/ship maintenance). Procurement and research and development accounts also will be cut by a total of $86 billion between 2016-2019, according to the report. At the 50th annual Year End AIA Luncheon held on Capitol Hill, AIA President and CEO Marion Blakey blasted the inefficiency of Congress and promised to “pound the pavement” to advocate both before Congress and the Executive Branch for policies more favorable to the industry, including the relegation of budget caps “to the dumpster of bad policy decisions.”