High priority alert

The aerospace industry is going through a defining period. In many ways it is stronger, more sophisticated and enjoying the benefits of new technology, with new generations of aircraft making a vital contribution to the UK economy — more than £22bn annually — but the challenges and the threats remain significant.

Competition grows every year, maintaining a leadership position in technology becomes ever harder and finding the skills and people necessary for a vibrant future ever more difficult.

And now we face arguably one of the biggest challenges in our history. How do we respond to the environmental issues posed by climate change and an effective green lobby that has us firmly in its sights?

For me, this period is all about our ability to develop an economical and environmentally sustainable UK aerospace industry. I am convinced that this needs to be our number one priority.

I spend a large part of my life travelling around the world, and get to see at first hand the aerospace industry in many countries.

And there is no doubt that these are exciting times. Orders for aircraft and engines are at record levels, with three new planes produced every day and orders in the pipeline for over 5,000 large aircraft and 10,000 engines.

In defence, major projects — such as the F-35 JSF, Eurofighter Typhoon, Strategic Tanker, A400M and the support necessary for the military operations in Iraq and Afghanistan — create significant opportunities for our industry.

The UK's defence links and relationship with the US, the world's largest aerospace market, remain vital. The excellent work on the proposed UK/US defence trade co-operation treaty is a demonstration of this.

Equally, the Defence Industrial Strategy, to be updated in December, shows just how important collaboration between the industry and the MoD can be.

All this is good news for the UK. We remain the world's second largest aerospace industry and we are a major contributor to the economy. More than a quarter of a million UK jobs are directly dependent on aviation.

But success has to be earned and in a global industry we have to work harder every day. In this respect, the demise of the

(DESO) clearly has the potential to adversely impact on our ability to continue winning defence business internationally.

It will come as no surprise to the government that we were bitterly disappointed by this decision. For all companies, but especially SMEs, it represents a real setback. We are in a global market, with excellent products and services — and we severely compromise our route to the valuable export market!

While we recognise that ministers will not reverse the decision, the need for an effective successor to DESO is paramount.

Our questions to government are; do you remain fully committed to defence exports, and will you provide sufficient resources to do the job properly?

But what does an economically sustainable aerospace industry look like in the future and what do we have to do to achieve it?

In my view, growth, productivity, skills and new technology are the building blocks for our sustainable future. Our productivity per employee is up 72 per cent in five years, but we need to keep improving productivity faster than our competitors — and that gets tougher all the time.

Finding the skills and talent — especially in manufacturing — to underpin our future growth remains a challenge.

Further R&D and investment in new technologies is essential if we are to continue to develop the aerospace products and services of the future. Let us not forget that the US spends over $70bn (£34bn) on R&D — more than we spend on total defence procurement.

Economic sustainability also means being ready and able to bid for the next major civil aircraft programmes — likely to be replacements for the Airbus 320 and Boeing 737 series — or in defence, to participate in the evolution of C4ISR and unmanned air vehicles.

And what of the challenge to our industry from climate change, the environmental lobby and changing public perceptions of aviation?

The truth is that while there is a clamour for restrictions, legislation, green taxes and curtailment, this cannot be the way forward. To travel by air is one of the great freedoms of the 21st century. The way forward is through the application of technologies and innovation, and our job is to help facilitate travel that minimises the impact on the environment.

We are already committed to a 50 per cent improvement in fuel efficiency, an 80 per cent reduction of Nitrogen oxides and a reduction in perceived external noise.

The recent launch of Boeing's 787 and Rolls-Royce's Trent 1000 engine are a demonstration of our ability to deliver progressively more environmentally friendly aviation.