Aviation industry downturn may have a silver lining for jetliner avionics manufacturers

Posted by John Keller

There seems to be a lot of bad news out there in the commercial aviation industry, which revolves around Boeing's report this week of a 50 percent reduction in first-quarter profits, and that the company also must reduce production of its widebody passenger jets because of weakening demand.

There seems to be a lot of bad news out there in the commercial aviation industry, which revolves around Boeing's report this week of a 50 percent reduction in first-quarter profits, and that the company also must reduce production of its widebody passenger jets because of weakening demand.

The aviation industry is hurting because the economy's on the ropes, homeowners are defaulting on mortgages, and folks are worried about losing their jobs. As a result, they're just not flying on commercial airlines as much as they used to, and airlines and aircraft manufacturers are feeling the pinch.

Airlines throughout the world are delaying deliveries of new aircraft they have ordered from Boeing, Airbus, and other airplane makers because right now there are too few passengers to put in the seats available. Furthermore, airlines are grounding some aircraft in their fleets because of sluggish passenger demand.

Sounds bad for the avionics industry, doesn't it? Maybe, but maybe not. The potential for avionics upgrades to existing aircraft may be the silver lining to this black cloud of the aviation economic downturn.

It's pretty clear that things will be tight in the avionics business for a while, but passenger aviation is bound to start picking up eventually. When it does, some aircraft operators may find it cheaper and faster to upgrade the avionics on grounded aircraft and put them back into service than to wait for new aircraft manufacturing to crank back up.

Not only that, but emerging requirements for NextGen satellite navigation and GPS-based air traffic control also will increase demand for avionics upgrades for existing commercial aircraft.

When we're ready to succumb to gloom and doom about the near-term prospect for new aircraft manufacturing, remember there are still a lot of aircraft out there waiting to get back into service. New avionics upgrades may be the way to make that happen very quickly.

Follow me on Twitter

Potential F-22 cancellation may hurt military avionics suppliers

Posted by John McHale

Well, after months of speculation in the media, Defense Secretary Robert Gates announced his plans last week for restructuring of the Department of Defense (DOD) including cutting the U.S. Air Force F-22 Raptor program.

The decision not to produce any more F-22s may hit many in the military avionics and electronics industry in the gut especially at F-22 prime contractor Lockheed Martin. Reportedly Lockheed claims canceling this program would result in the loss of about 90,000 jobs.

I remember speaking to people from Lockheed in Ft. Worth, Texas, back when they won the F-35 Joint Strike Fighter (JSF) program and was told that people were crying with joy because the win would guarantee work for 30 to 40 years and mean they could send their children and grandchildren to college.

It hits every area of the community.

It won't just be Lockheed jobs that disappear, but many from the second and third tier suppliers that design avionics hardware and software for the F-22's advanced systems.

The loss of the F-22 will affect the companies that supply the mission computers, cockpit displays, real-time operating systems all the way down to the optical connectors.

These suppliers will still support the aircraft that have already been bought, but the loss of future orders will change their one, two, and five year outlooks drastically.

However, there will still be opportunities for designers of defense avionics and other electronics solutions. Gates says that the DOD will still support the JSF and increase funding for Special Forces operations to go after insurgents.

They are trying to restructure the military to better fight the War on Terror. Many in the current administration feel that the F-22 was designed to fight a more conventional type of war.

Therefore the DOD will still need electronics for intelligence, surveillance, and reconnaissance more than ever before to help track down terrorists worldwide. This will come in the form of better communications and electro-optics capability for Special Forces, video and satellite surveillance technology, electronics for unmanned systems, etc.

Despite these opportunities, the loss of the F-22 will hurt, but we won't see how much for at least a year or two.

Some leaders in Congress reportedly protested the cut of the program claiming that cutting funding to help the warfighter is a mistake and only being done because the Obama administration wants to spend money anywhere else such as bailing out a failing General Motors.

I keep thinking of what Ronald Reagan said once during a debate with Jimmy Carter --that "a recession is when your neighbor loses his job, a depression is when you lose yours and recovery is when Jimmy Carter loses his."

Something tells me some folks at Lockheed might want to swap out Jimmy Carter for someone else right now...

You be the judge.