US govt aid to aerospace could mean oversupply in future, but avert ‘catastrophe’ now: Analyst

While govt support would provide vital relief to US aerospace manufacturing at a time of impending crisis, such aid could create a “synthetic” aircraft market to the detriment of the industry in future years. That’s one concern held by Teal Group aerospace industry analyst Richard Aboulafia, who thinks govt aid could be essential to averting a broader aerospace manufacturing “catastrophe”. But he says aid comes at a price. Aboulafia notes the aerospace industry typically swings between 7 up years followed by 3 down years, during which commercial aircraft delivery values sink about 35%. “You’ll probably see it be worse than that by 2022, because you’ve just removed several years of accrued demand and kept the synthetic market going,” Aboulafia says. “I’m a little concerned about the years to come.” <br/>