The Empty Horizon

The U.S. aerospace industry has long booked itself on a nonstop flight into the future, speeding from one set of new aircraft to more advanced successors on the horizon. Now the horizon is empty, and has been since Congress shot down the American supersonic transport two years ago. For the first time since World War II, U.S. aerospace companies have no new generation of silvery flying ships that is imminently scheduled to zoom off the drawing boards and onto the production line. Some aerospace men are not bothered by what they regard as a welcome breathing spell, but others are. Says Eastern Air Lines Vice President Scott Crossfield: "I practically guarantee that the next new aircraft purchased by U.S. lines will be bought abroad."

The U.S. lags behind European consortiums in building two other types of aircraft that could well become workhorse transports by the latter half of the decade. One is a twin-engine wide-body jet for short-to medium-range hauls. The 300-passenger A-300B airbus, which is being built by a five-nation European consortium, will be the first such plane on the market; it is scheduled for commercial service next March. The other type is a STOL (for short takeoff and landing) plane for brief hops between urban airports. France's Dassault-Brequet Mercure craft should be providing STOL-type service by year's end, and no U.S.-built STOL will be available anywhere near then. Says Karl G. Harr Jr., president of the Aerospace Industries Assoc. of America: "The Europeans are developing and flying aircraft for which no U.S. counterpart exists."

American plane builders are hardly going out of business. Indeed, one reason for their lag in building the aircraft of the future seems to be their success in marketing the planes of the present. The three American wide-bodied jets --Boeing's 747, McDonnell Douglas' DC-10 and Lockheed's L-1011--are selling so fast that they are providing airlines with more seats than can be filled. Thus the U.S. companies see no market for new planes any time soon, and they have not pushed development of the advanced designs that they do have. Boeing and McDonnell Douglas are participating in STOL development with foreign partners, and McDonnell Douglas has undertaken advance planning on an airbus that could be built from its DC-10 design, but it has held up on production. Says Vice President Jackson McGowen: "No American company has committed itself to the A-300B airbus [with which the McDonnell plane would compete] and even in Europe sales are going slowly. The airlines are not ready for it."

In short, the U.S. plane builders are gambling that they can indeed provide the aircraft of the future--when the airlines are ready. But if the market opens up sooner than they expect--and worldwide air travel is growing at 12% annually--then the U.S. balance of payments could suffer badly. The aerospace industry for years has generated a bigger net export balance than any other manufacturing business. But a trade analyst in the Commerce Department estimates that the aerospace balance of payments "could become negative as early as 1976 and, if U.S. airlines go abroad to buy their twin-engine wide-bodies, STOLs and supersonics, could grow to an unfavorable total of $4.5 billion annually by 1985." Whether the U.S. does buy foreign planes depends, of course, on whether they live up to their design promise--something they have often failed to do.

U.S. plane builders grumble that they also face rough competition in the form of vast financial support granted by European governments to aerospace projects abroad. At the same time, the SST cancellation and severe slowdowns in space projects have taught the U.S. aerospace industry that Washington can be a fickle customer. Most firms have sought to minimize their reliance on Government--and in fact on the whole wild blue yonder--by pushing diversification programs that range from a Rockwell International venture into industrial knitting machines to Boeing's experiments with alfalfa production.

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