European Advisory Group on Aerospace outlines way forward for industry

July 17, 2002

Brussels, 16 July 2002

The High-Level European Advisory Group on Aerospace today presented its report, Strategic Aerospace Review for the 21 st Century (STAR 21) to the President of the European Commission, Romano Prodi.

The Group's report concludes that a competitive aerospace industry is essential to provide the means and capabilities needed to match Europe's economic ambitions and its policy aims.

The report makes a series of recommendations for policy decisions at European level that would facilitate this objective. The Group was set up in 2001 to analyse the state of the industry and assess its longer-term policy needs.

From the EU Institutions, the Group comprises the Commissioners Loyola de Palacio, Erkki Liikanen, Philippe Busquin, Christopher Patten, Pascal Lamy, Javier Solana (the EU High Representative), the Members of the European Parliament Carlos Westendorp y Cabeza and Karl von Wogau.

From the industry, the Group comprises Jean-Paul Béchat (SNECMA and President of the European Association of Aerospace Industries AECMA), Manfred Bischoff (EADS), Sir Richard Evans (BAE Systems), Jean-Luc Lagardère (EADS), Alberto Lina (Finmeccanica), Denis Ranque (THALES) and Sir Ralph Robins (Rolls-Royce).

Romano Prodi, President of the European Commission said: "The establishment of the Advisory Group on Aerospace has proved a valuable initiative which I very much welcome. STAR 21 brought together aerospace industry leaders and European policy-makers to identify the risks and opportunities faced by this vital European industry and to set out policy recommendations for the future. My colleagues in the European Commission and I will be considering the policy implications in the coming months."

Erkki Liikanen, European Commissioner responsible for Enterprise and the Information Society said: "The sustained competitiveness of Europe's aerospace industry is an essential component of a successful European economy. As Chairman of the Advisory Group I am inviting a wide response to the analysis and recommendations. The reaction of the Member States and the EU institutions will of course be especially important in determining the way ahead for the industry."

EU Research Commissioner Philippe Busquin welcomed the adoption of the STAR 21 report and underlined the role of EU research in the field of aeronautics and space. "Medium- and long-term industrial strategies depend to a large extent on scientific progress. The aerospace sector represents a case in point, where Europe can build a strong industrial platform based on world-class technological applications, products and processes, by pooling resources at EU level to achieve a competitive critical mass. Through its successive research framework programmes, the Commission has funded cutting-edge research projects in this area, and at the same time it has shaped a consistent aerospace policy relying on a sound research effort.

Over time the EU has invested more than €1 billion in the funding of about 300 high-level research projects in the aeronautics and space sector. €1,075 billion is earmarked for aeronautics and space research in the EU's 6 th Research Framework Programme (2002 2006)."

Jean-Paul Béchat, SNECMA-chairman and AECMA-President said: "We are fortunate to have a strong Aerospace Industry in Europe, built on strong co-operation between National Governments and Industry over many years. To continue to build a high technology industry in support of developing European aspirations, a new framework must be developed which recognises the transnational nature of our industry and the evolving relationship between the Member States and the European Union. This report identifies the challenges and must be used to stimulate timely actions".

The main recommendations of the Report are the following:

Global markets : STAR 21 calls for a level playing field which allows fair competition in world markets, the relaxation of "Buy American" rules, convergence in export control procedures on products with US components, reciprocal market access and international co-operation programmes to help build new trading relationships.

Operating environment : Research is a key factor for competitiveness. A co-ordinated strategy and increased resources are essential. An estimated €100 billion is needed over the next 20 years for European aerospace research and technology, funded from public and private sources. Tax incentives should also be considered. Measures should be taken to secure the availability of a highly skilled and mobile workforce.

Governance of civil aviation : The EU should become the policy-maker and regulator in all areas of civil aviation, speaking as the united voice of Member States in international bodies and ultimately becoming a full member of the International Civil Aviation Organisation, together with Member States. A master plan for air traffic management should be developed under the Single Sky initiative.

Defence : Security, defence and related research require the greatest efforts. This should lead to a coherent structure for defence and security equipment in Europe. Military requirements should be harmonised and procurement budgets planned jointly. There should be more coherent spending on defence research. Capability gaps identified in the European Headline Goal should be bridged. Additional resources should be provided.

Space : A consolidated European space policy with adequate funding is needed. The Galileo satellite positioning system and the GMES satellite monitoring projects should be mobilised as quickly as possible. A fully Europe-based capability for surveillance, reconnaissance and command/control should also be developed. Europe should also maintain an independent and competitive access to space.

The Report states that Europe's aerospace sector is in a critical phase. A long-term policy approach is required since it is an industry which must operate with a 20-30 year perspective. The world market is intensely competitive and if Europe is to continue as a flourishing centre of excellence for aerospace, then the appropriate policy decisions must be taken rapidly, both to meet the competitiveness goals set out in the Lisbon European Council in 2000 and to provide the means and capabilities needed to underpin policy ambitions supporting Europe's role and influence in the world.

The STAR 21 report underlines that Europe may not be able to fulfil its own policy ambitions under the Common Foreign and Security Policy if political commitments cannot be backed up by European security and defence capabilities. The STAR 21 report notes that new policy initiatives might be envisaged at European level, involving national governments, the EU institutions and of course industry itself, to provide a secure framework for the industry's competitiveness in both the civil and defence sectors. The STAR 21 report finds that the wellbeing of the industry depends on the twin pillars of civil and defence which are both complementary and in a number of instances mutually dependent. The two sectors share skills and products, enjoy the advantages of economies of scale and rely on the application of advanced technologies. The US, which is Europe's principal competitor and also key partner, recognises the linkages between defence and civil uses and invests heavily to fund research and innovation, posing a constant challenge to European industry.

Major restructuring has been undertaken in recent years, so the industry is now organised on a European scale, but policy evolution has not kept pace with these structural changes. STAR 21 identifies the initiatives which are now needed to sustain competitiveness into the future. These cover trade relationships, the operating environment, governance of civil aviation, defence and space.

The Advisory Group stresses the need for a coherent, long-term policy perspective, which matches the long-term nature of the aerospace industry. There are two particular priorities: (1) Rapid progress in developing a more coherent European market in defence equipment; and (2) Major improvement to the structure of European research and technology in civil aeronautics, defence and space.

The full text of the report may be found at:

DN: IP/02/1059 Date: 16/07/2002

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