It's Teal Tea Leaves Time Again

Asian Aerospace 2000 -- Looking into their well used crystal ball, aircraft analysts and soothsayers of the respected Teal Group, of Fairfax, Virginia, predict that 2,932 combat aircraft valued at $136.1 billion (in today's money) will be built over the next decade. The prediction covers all combat aircraft of more than 20,000 pounds MTOW, all supersonics save for the Italo-Brazilian AMX and the Anglo-American Harrier. Russian aircraft are included but Chinese ones are not.

In a forecast to be published here today, Teal contrasts its latest 10-year prediction with the reality of the 4,445 fighters built between 1990 and 1999. In today's money they were worth $152.5 billion.

"After a traumatic decline from the Cold War years the fighter market has been struggling to grow again," says Teal senior analyst Richard Aboulafia. "Hopefully, procurement holidays have created a market trough; the alternative to that explanation is too unfortunate to contemplate.

"After several false starts, we expect the market to turn healthy again before the second half of our forecast period," Aboulafia says. "The annual value of fighter production will double by 2005."

The big loser, in terms of market share, will be Boeing with the end of the programs it acquired with McDonnell seeing its share of the fighter market falling from 40% last year to a predicted 16% in 2009. But this could change "significantly" if the F-15 wins the F-X competition in South Korea,

Teal views SE Asia's recent economic crisis as having minimal effect on the market forecast. Taiwan was largely immune while South Korea was recovering rapidly and was a big rebounding market. Indonesia was out of the game, but Vietnam would join the rest of the world, sooner or later, and was already flying western airliners.

"As it gets richer and more open can western fighters be far behind?" Aboulafia asks.

By Bob Rodwell