History does not lack for examples of giant leaps forward in
science and technology that subsequently transform human experience
and possibilities. But few have touched more lives than the
invention of the aeroplane at the beginning of the last century.
It has shrunk the planet, destroyed distance and vastly expanded
human mobility. The resulting economic and social benefits have
of the skies has liberated us from the bonds imposed by geography,
terrain and water. Air routes are the highways of the global
economy, transporting people and goods over vast distances at
great speed. Aviation has massively multiplied and facilitated
business and leisure opportunities, cultural exchanges and the
development of international institutions and political relationships.
Very few other developments have made such an outstanding contribution
to the development of mankind over the last 100 years.
must "go for it"
The rapid journey from the first tentative flights to the modern
airliner is a testament to the restless search for technological
improvement that has long characterised the aircraft business.
Many aspects of technological evolution are shaped by a combination
of changing social needs and competitive market forces. Today,
these forces are still generating relentless pressures for change
in the air transport system.
report is an attempt to demonstrate that Europe can continue
to meet the challenge of change by mobilising all of those interests
and actors - nowadays known as "stakeholders" - behind
the task of producing the competitive products and the air transport
system that will be needed in the first decades of this new
are two great prizes: global leadership in the marketplace and
a world class air transport system for Europe. Europe must go
for them or its achievements of the last 30 years will be in
jeopardy. Its air transport system has become an indispensable
part of the continent's economic infrastructure. Turnover in
the aeronautics sector exceeded 65
billion in 1999 and its balance of trade surplus - the difference
between the products it sells to the world and the equivalents
that are imported - was 22
it is currently struggling to keep pace with the phenomenal
increase in mobility and demand, Europe's air transport system
is providing safe, reliable air travel that is essential to
the requirements of millions of people. It also guarantees them
a choice. Without European aeronautics, air travel over medium
and long-haul routes would be almost completely dominated by
of its responsibilities to society at large, the sector is well
aware that it has to find an acceptable balance between public
expectations and requirements, and the constant, fierce competitive
pressures upon it. A generation ago, "Higher, Further,
Faster" were the imperatives for any vision of the future
for air transport. Now they are "More Affordable, Safer,
Cleaner and Quieter", reflecting the need to combine cost-effectiveness
with an uncompromising attachment to safety and environmental
objectives. The key to securing these objectives is investment
in Research and Technology(1) according
to a strategy that can meet the demands of the market as well
as the needs of the community.
the "knowledge society"
Aeronautics is a key asset for the future of Europe. Its direct
contribution to economic prosperity is a measure of its success
in pioneering the "knowledge society" that the European
Union is now urgently seeking to achieve(2).
As users, developers and suppliers of advanced innovative technologies,
aeronautics companies know the value and importance of continuously
developing human skills.
of the 400,000 people directly employed in the industry are
highly skilled "knowledge" workers, well practised
in the use and exploitation of advanced technologies, including
the new digital information technologies. Others push forward
the technological frontiers in research laboratories, developing
the knowledge that is crucial for keeping the industry's firm
grip on world markets. Many of the fruits of their research
also find applications in markets quite distant from aeronautics
that need the technologies but lack the resources to develop
them. A great deal of the research work is done in teams, by
people whose different national and cultural backgrounds are
a reminder of the talent that Europe can mobilise.
strength was built on earlier strategies
Aeronautics is a very unusual business requiring specific rules:
it works on very long lead times and requires huge capital sums
for developing its products. Governments are important sources
of research funds and exercise unusual
influence over priorities for civil and military products, while
manufacture of its largest and most costly items, aircraft and
their engines, is concentrated in a few very large companies.
European sector invests 15% of its turnover in R&D (more
billion a year) and has built a global position on much less
public financial support than is enjoyed by its main rivals.
The seeds of its current strength were sown in the 1960s. They
were not scattered randomly, but planted according to strategies
for achieving competitive products for civil and military aircraft
markets into the 21st century.
benefits are now being harvested. Airbus is one of the world's
two dominant civil aircraft producers. Its share of the market
grew steadily throughout the 1980s and its share of world order
books is now around 50%, even though more than 85% of the world's
passenger aircraft have been built in the US. In the civil helicopter
market, EU-designed and originated helicopters now hold around
32% of the world market, while European manufacturers of regional
jet and turboprop aircraft have had more than 60% share of these
markets over the past 10 years.
of market shares in civil aero engines is difficult because
of the intensity of cooperation between European and foreign
firms. But there are striking differences in size between firms:
the two largest US producers make twice the revenues of their
its part, the equipment sector has been able to maintain a leading
role in most areas and continues to be competitive against much
larger foreign rivals. Little known outside the industry, for
example, is the fact that the vital "Primary Flight Control"
systems on the latest aircraft from both Boeing and Airbus were
developed and are produced in Europe.
and consolidation are more essential than ever
But new product development is enormously expensive and for
many years the costs of developing and producing a family of
new civil airliners have been progressively beyond the reach
of one company, and of the budgets of most single nations. So
companies inside and outside Europe have had to seek partnerships.
The most celebrated in the airframe sector is the European Airbus
consortium set up in 1969. Alliances, many of them transatlantic,
also characterise relations between engine and equipment manufacturers.
partnerships reflect the fact that aeronautics is a dynamic
global business in which the drive for competitive advantage
seeks out the best possible synergies, wherever they can be
found. Collaboration is constrained by competitiveness rather
than geography, which is why European companies need to be world
class to forge the best possible partnerships.
the European Union, and more recently supported by it, the pieces
on the board have been energetically rearranging themselves.
Collaborative networks for R&D have proliferated across
borders, broader commercial relationships created and bonds
established that have helped to pave the way for mergers, joint
ventures and takeovers. Although restructuring of the sector
in Europe has lagged behind the equivalent process in the United
States, this process of consolidation is creating the platform
for maintaining and enhancing its competitiveness over the next
couple of decades. R&T systems need redesigning, reorganising
and refitting if they are to support the vision described in
the following pages.
vision is broad and comprehensive, seeking to bind and coordinate
the efforts of all stakeholders behind a strategy for competitive
excellence dedicated to meeting society's needs. It will not
be easily achieved. But if the vision can be shared and acted
upon by all, the payoff is enormous: leadership in the global
marketplace and a first class air transport system for Europe.
Throughout this report "Research and Technology" (R&T)
refers to developing new technologies while "Research and
Development"(R&D) includes also the effort for the
development of new products.
(2) At its meeting in Lisbon in March 2000
the European Council set the strategic goal for the EU "to
become the most competitive and dynamic knowledge-based economy
in the world".