WASHINGTON \u2014\u00a0The aerospace industrial base is healthy but entering a transitional period, a panel of experts said Monday at the Air Force Association Air and Space Conference.<\/p>\n\n\n\n
Richard Aboulafia, an analyst with the Teal Group;\u00a0Jim McAleese, consultant and founder of McAleese associates;\u00a0and David Melcher, president and CEO of the Aerospace Industries Association\u00a0discussed the coming paradigm shift as the US country <\/span>transforms from an aviation nation to an aerospace nation.<\/p>\n\n\n\n On the positive side, total output by the US aircraft industry totaled $96.9 billion in 2014, which accounted for 54.3 percent of production worldwide, Aboulafia said. But in the coming years, the landscape will be transformed by the retirement of numerous aircraft platforms.<\/p>\n\n\n\n “If you look at production programs in the US aircraft industry, man there is a lot scheduled to die over the next couple of years,” including the C-130J, the longest lived aircraft in US military history, he said. During that time, the F-35 takes up the lion\u2019s share of the military aircraft budget before the T-X trainer and Long-Range Strike Bomber LRS-B <\/span>come online.\u00a0<\/p>\n\n\n\n It will be a big challenge for both the US military and the industrial base to develop more capabilities with fewer platforms, he said.<\/p>\n\n\n\n During the Reagan administration, the US produced almost 400 tactical combat aircraft a year, but that number is currently closer to 75.<\/p>\n\n\n\n “From a national security standpoint, we are coasting on a legacy fleet of F-15s, F-16s, FA-18s and whatever else. They’re aging, they’re still being used constantly, and there really isn’t enough cash to recapitalize them,” he said.<\/p>\n\n\n\n Melcher noted that while the Murray-Ryan budget agreement gave the defense industry a respite from years of declining defense budgets, there does not appear to be a Murray-Ryan 2.0 on the horizon.<\/p>\n\n\n\n “That dialog doesn’t seem to be happening,” he said of the current Congress. “If we’re facing another long term [continuing resolution], we have all these programs that were talked about as being important to produce capabilities and effects [that] are not resourced; that’s going to be a problem for us.”<\/p>\n\n\n\n McAleese said the industrial base would be reshaped by mergers, acquisitions and spinoffs, particularly in the professional services sector. Companies will\u00a0be opportunistic, as Lockheed Martin was in its $8 billion bid to buy Sikorsky Aircraft earlier this year, he said.<\/p>\n\n\n\n All three panelists agreed that consolidation was inevitable, as tight defense budgets will support only a limited number of defense companies.<\/p>\n\n\n\n The decision on the Long Range Strike Bomber contract,\u00a0expected in the coming weeks between competing teams from Boeing\/Lockheed Martin and Northrop Grumman,\u00a0will have “tectonic consequences,” said Aboulafia. However, there is no evidence that decision makers will give the losing team preferential consideration for the T-X contract, he said.<\/p>\n\n\n\n