1NC

A. Uniqueness: Aviation industry growing now this is contingent upon sustained air travel demand
Zacks Equity Research 5/4/12. Leading investment research firm focusing on equities, earnings, estimates, and stock analysis. Airline Industry Stock Outlook - May 2012. http://www.zacks.com/stock/news/74514/airline-industry-stock-outlook-may-2012
The U.S. airline industry is expected to remain profitable over the next two decades given the improving worldwide trends in air travel. However, growth may be held back until 2015 due to surging fuel costs and economic uncertainties in the U.S. and Europe.

Although U.S. airlines will see a small dip this year, the demand for air travel will double over the next 20 years, as predicted by the U.S. Federal Aviation Administration (FAA). Passenger demand is expected to grow 2% to 746 million in 2013 and about 3% in the future years, reaching $1 billion by 2024 and $1.2 billion by 2032. The FAA projects air traffic, customarily measured in billions of revenue passenger miles -- implying a unit of one mile flown by one passenger -to grow by more than 90% over the same period. Revenue passenger miles would jump from 815 billion reported last year to 1.57 trillion by 2032 at an average annual rate of 3.2%. International traffic is expected to grow 4.2% per year, in contrast to domestic travel that will growth at a more modest clip of 2.7% annually through 2032. This projection assumes a steady economic recovery with no major calamities like a large rise in oil price, swings in macroeconomic policy or financial meltdowns. Further, major North American airlines would raise capacity (available seat miles) at an annual rate of 3.1%, reaching 1.89 trillion by 2032. The 20year airline growth is expected to stem from the implementation of NextGen, the satellite-based navigation system that aims to make air travel more efficient. The carriers are taking numerous steps to improve their profitability as described in the above sections. Moreover, the growing demand for air travel and a relatively lesser number of planes will make future fare hikes possible over the next two decades. Airline mergers and consolidation will bring down the number of flights and reduce the number of cities
served.

B. Links: HSR trades off with demand for airplanes Europe and China prove
Butterworth-Hayes 12. Philip Butterworth-Hayes, Editorial Director at PMI Media, February 2012. Aerospace America. Industrial Beat. High-speed rail will impact airliner markets. http://www.aerospaceamerica.org/Documents/Aerospace-America-PDFs-2012/February2012/International-Beat-FEB2012-2.pdf
The distance between Madrid (with a population of 5.7 million people) and Seville (population 750,000) is 335 mi. Before

the HSR link was established between the two cities at the start of the 1990s, the mix of air/rail passengers was 67%/33% air to rail. After the HSR link, that changed to 16%/84% in favor of rail and will rise to 13%/87% in favor of rail by 2020, according to Frost & Sullivan forecasts. The story is the same throughout Europe: HSR links are being developed or expanded between key trading centers at the expense of airline travel. As HSR services are established on key routesLondon-Paris, LondonBrussels, Barcelona-Madrid, ParisLyonsairlines have either pulled frequencies, reduced aircraft sizes, or departed from the routes altogether. By 2020 a new high-speed line will be built between Paris and
Barcelona, cutting journey times on the 514-mi. route from 8 hr to 4.5 hr. This will be just the start of a new interconnected FranceSpain HSR jointly operated network, managed along the same lines as the U.K.-France Eurostar HSR system. By 2020 most of

Europes major trading centers will be interconnected via an HSR network. It

is not just in Europe that aviation is losing out to rail. At the end of March 2011 all airline services between Nanjing and Wuhan in China were canceled following the establishment of an HSR link between the two cities , offering
a cheaper and competitively fast link on the 284-mi. journey. The introduction in 2007 of the 209- mi. Taiwan High Speed Rail link between Taipei and Kaohsiung has reportedly cut domestic airline services by 50% in the past three years. Some

believe that competition between rail and air has only just begun. The impact of the HSR industry and rail in general on air networks has not been as great as it could have been because of the commercial management of the rail system, which is still broadly government controlled, says Ian Lowden, principal with the U.K. aviation consultants LowdexxAviation Consulting. Airlines, in general, have developed far more flexible and advanced management systems. The rail industry lacks a global distribution system as effective as the airlines Amadeus systembut that could come. As air travels competitive advantages have been eroded through fuel price increases and taxes, the airline industry needs to up its game to face a potentially more aggressive and competitive rail system. So what impact will these developments have on the market for civil aircraft worldwide, especially as HSR links
become available in the dynamic air traffic growth regions of China, India, and the Middle East?

C. Impacts: Aviation industry key to economy jobs and GDP

FAA 11. Federal Aviation Administration, August 2011. The Economic Impact of Civil Aviation on the U.S. Economy. http://www.faa.gov/air_traffic/publications/media/FAA_Economic_Impact_Rpt_2011.pdf The civil air transport industry provides economic benefits for the United States and the world. In a world of decreasing barriers to trade, the U.S. civil aviation industry remains a unique engine for innovation and technological progress, one that provides infrastructure that keeps the nation competitive. This report found that, once all impacts are identified, civil aviation accounted for 5.2 percent of the U.S. economy in 2009. Aviation contributes to economic growth and to stronger ties to local and global markets for every region in the nation. The total output of civil aviation-related goods and services amounted to $1.3 trillion in 2009 and generated more than 10 million jobs, with earnings of almost $394.4 billion. Specific areas of civil aviation such as air cargo have contributed to more effective networking and collaboration between companies far and wide. Recovery in the wake of the recent recession presents many challenges and opportunities for aviation and the U.S. economy as a whole. There is evidence that the capacity reductions made by airlines and airports as the result of high fuel prices allowed the industry to better weather the storm, yet the prevailing economic winds will lead the industry to continue to innovate and become leaner and more responsive to volatile market conditions. The cost of fuel will likely remain a continuing concern for airlines and those affected by
air transportation. Many analysts believe that the price of oil will continue to transform the airline industry for years to come, just as it will influence the prospects of other sectors of the economy. As it did in the past century, the role of air transportation will continue to grow for the U.S. and global economies. The

economic impacts of civil aviation quantified in this report summarize the benefits made possible by a vital and innovative industry. The industry contributes positively to the U.S. trade balance, creates high-paying jobs, helps keep just-intime business models viable and connects us to friends, family and commercial opportunities. As the role of air transportation evolves and becomes even more integral to our way of life, a safe and efficient air transportation system will continue to be a vital, even essential, component of a strong and healthy American economy in the 21st century.

Global economic crisis causes war - great power transitions

Royal 10 Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department of Defense, 2010, Economic Integration, Economic Signaling and the Problem of Economic Crises, in Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, p. 213-214
Less intuitive is how periods of economic decline may increase the likelihood of external conflict . Political science literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modelski and Thompsons (1996) work on leadership cycle theory, finding that rhythms

in the global economy are associated with the rise and fall of pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crises could usher in a redistribution of relative power (see also Gilpin, 10981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Fearon, 1995). Alternatively, even a relatively certain redistribution of power could lead to a permissive environment for conflict as a rising power may seek to challenge a declining power (Werner, 1999). Seperately, Polllins (1996) also shows that global economic cycles combined with parallel
leadership cycles impact the likelihood of conflict among major, medium, and small powers, although he suggests that the causes and connections between global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copelands (1996,2000) theory of trade expectations suggests that future expectation of trade is a significant variable in understanding economic conditions and security behavior of states. He argues that interdependent

states are likely to gain pacific benefits from trade so long as they have an optimistic view of future trade relations. However, if the expectation of future trade decline, particularly for difficult to replace items such as energy resources, the likelihood for conflict increases , as states will be inclined to use force to gain access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it triggers protectionist moves by interdependent states. Third, others have considered the link between economic decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong correlation between internal conflict and external conflict, particularly during periods of economic downturn. They write, The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict tends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify the extent to which international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002, p.89). Economic decline has also been linked with an
increase in the likelihood of terrorism (Blomberg, Hess, & Weerapana, 2004), which has the capacity to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government. Diversionary

theory suggests that, when facing unpopularity arising from economic decline, sitting governments have increased incentives to create a rally round the flag effect. Wang (1996), DeRouen (1995), and
Blomberg, Hess and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly correlated. Gelpi (1997) Miller (1999) and Kisanganie and Pickering (2009) suggest that the tendency towards diversionary tactics are greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods

of weak economic performance in the United States, and thus weak presidential popularity, are statistically linked to an increase in the use of force..

Uniqueness
US air industry strong
Zacks Equity Research 5/4/12. Leading investment research firm focusing on equities, earnings, estimates, and stock analysis. Airline Industry Stock Outlook - May 2012. http://www.zacks.com/stock/news/74514/airline-industry-stock-outlook-may-2012
Though the airlines have not yet released their global 2011 actual profit numbers, the

IATA projects that the industry should earn profits of $7.9 billion. This is up from the previous projection of $6.9 billion, primarily attributable to better performance of the Chinese carriers. However, U.S. airlines announced a
profit of $390 million overall in 2011, which is much lower than $2 billion projected by the IATA. The 2011 profit also plunged 86% from $2.7 billion earned in 2010. This

nevertheless marked the second consecutive year of profits after incurring cumulative losses of more than $50 billion in the past decade. Fuel price volatility, the worst
threat to the airline industry, represents about 35% of total expenses, up from 30% in 2010. North American airlines yielded 0.3% of the net margin, down from 2.2% in 2010. Revenue

climbed 12.6% year over year with total expenses rising 15.5%, primarily due to a 36.1% rise in fuel costs. Further, the U.S. air carriers are providing excellent services to their passengers. They are performing at record levels when it comes to arriving on-time, baggage handling, fewer customer complaints, lower cancellations and lower overbooked flights.

Aviation industry strong fuel conservation efforts solve costs

FAA 11. Federal Aviation Administration, August 2011. The Economic Impact of Civil Aviation on the U.S. Economy. http://www.faa.gov/air_traffic/publications/media/FAA_Economic_Impact_Rpt_2011.pdf Even during tough times, the efficiency of our air transport network serves commerce and supports jobs that maintain and revitalize the strength of the U.S. economy. Today, despite the lingering effects of the recent recession, there is cautious optimism in the air transport sector of the U.S. economy. 2 The industry continues to be flexible, developing new, innovative ways to lower costs and increase revenues. For example, as the price of jet fuel climbs, air carriers are finding innovative ways to conserve fuel and lower costs by: replacing old, heavy drink carts with new lighter
versions, removing seat back telephones, installing lighter seats and TV monitors, applying new coating on airframes to improve airflow, and purchasing more tugs to reduce engine fuel use. 3 Investment

in air transportation infrastructure leads to smart growth and job creation. The American Recovery and Reinvestment Act of 2009 provided funding to invest $200 million in FAA facilities and equipment and $1.1 billion in grants-in-aid for airports. The 2011 FAA Aerospace Forecast expects a 4.9 percent increase in RPM between fiscal years 2010 and 2011, and projects average annual growth rates of 3.8 percent per year through 2031 for U.S. airlines.

Aerospace high now record high sales

Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf
For commercial aerospace, 2010 marked

the beginnings of what appears to be an upcycle in sales and production, both in the large commercial aircraft segment. Indeed, in 2011, commercial aircraft production reached a record high of 1,011, and sales orders recorded were the second highest ever. With production rate increases being announced by the large aircraft manufacturers,

and the introduction of next generation fuel efficient aircraft, the supply base may expect to experience a prolonged growth pattern, if past is prologue. On the other hand, this increase in production activity
poses a potential capacity challenge, as suppliers gear up to meet the rate increases.

Airbus investing in the US creates thousands of jobs

Aviation Today 7/2/12. Airbus to establish assembly line in United States. http://www.aviationtoday.com/press_releases/201207021100PR_NEWS_USPR_____DC33900.h tml
In a major strategic announcement today, Airbus

said it will establish a manufacturing facility in the United States to assemble and deliver A320 Family aircraft. Located at the Brookley Aeroplex in Mobile, Alabama, it will be the company's first U.S.-based production facility. Airbus stressed that the assembly line, which will create jobs and strengthen the aerospace industry, is part of its strategy to enhance Airbus' global competitiveness by meeting the growing needs of its customers in the United States and elsewhere. The facility in Alabama will assemble the industry-leading family of A319, A320 and A321
aircraft. The company said construction of the assembly line will begin in summer 2013. Aircraft assembly is planned to start in 2015, with first deliveries from the Mobile facility beginning in 2016. Airbus anticipates the facility will produce between 40 and 50 aircraft per year by 2018. "The time is right for Airbus to expand in America," said Fabrice Bregier, Airbus President & CEO at the announcement today in Mobile. "The U.S. is the largest single-aisle aircraft market in the world with a projected need for 4,600 aircraft over the next 20 years - and this assembly line brings us closer to our customers. Mobile is now becoming part of Airbus' global production network, joining our successful and growing assembly lines in Hamburg, Toulouse and Tianjin."

Links
HSR kills aviation competitiveness China proves
CAPA 11. CAPA Center for Aviation, April 15, 2011. China's aviation industry to suffer billions in losses from high-speed rail. http://centreforaviation.com/analysis/chinas-aviation-industry-tosuffer-billions-in-losses-from-high-speed-rail-50007 High-speed rail is rapidly becoming a pillar of China's transportation network and an increasing threat to local airlines that have prospered from years of strong demand growth and a lack of efficient ground transport alternatives. China's burgeoning high-speed rail network is already the
world's most extensive at 8358 km as at the end of 2010. But that is just the start. A 50% increase in the network is planned in 2011 alone. Chinas

aviation industry is bracing for a reduction in revenues and profitability arising from rising competition from high-speed rail. International expansion is an increasingly necessary option for China's airlines. Some estimates put the loss in revenue for Chinas aviation industry (from reduced traffic and price pressure) at up to CNY10 billion (USD1.5 billion) in 2012, or 34% of the total. CAAC Director Li Jiaxiang stated some 50% of flights less than 500 km in length could become unprofitable as a result of competition from high-speed trains and around 20% of flights of between 800 and 1000 km could also run at a loss for the same reason. But sectors above
1500 km are not likely to be threatened, he added.

Politicians reduce airline investment regardless

Butterworth-Hayes 12. Philip Butterworth-Hayes, Editorial Director at PMI Media, February 2012. Aerospace America. Industrial Beat. High-speed rail will impact airliner markets. http://www.aerospaceamerica.org/Documents/Aerospace-America-PDFs-2012/February2012/International-Beat-FEB2012-2.pdf But there is a downside to this. Some European politicians now see HSR as an alternative to airline services, rather than a parallel, if connected, transport system. In the U.K., for example, the government has declared it will not build any more runways in the southeast but will promote new HSR lines, potentially depressing the number of aircraft required by U.K. airlines.

HSR hurts aviation industry China proves

OSCCC Ocean Shipping Communication Center China *News source on Chinas transportation+ 10/14/11 High speed rail cuts into airline success http://coscc.ebizchina.net/2011/index.php/news/railway-news/high-speed-rail-cuts-intoairlines-success This is the first air route halted at Wuhans airport as the city emerges as a hub of Chinas expanding high-speed railway network, which had a total length of 8,358 kilometers at the end of last year. Previously, two daily flights linked Nanjing and Wuhan, about 520 km from each other, and a full price oneway ticket cost 730 yuan ($111). The intercity bullet trains, which began service in 2009, running at up to 250 km per hour, offer second-class tickets for 180 yuan.

The high-speed trains have an occupancy rate of about 90 percent, outperforming the flights, which had an occupancy rate of less than 50 percent on workdays. With additional bullet train services coming in the third quarter of this year, the rail system, which has drawn international attention, is expected to consolidate its advantage. Our flights were seriously affected after the high-speed rail lines opened, Meng Qian, deputy director of the marketing department of Lucky Air, said on Friday. The Yunnan-based budget airline was making

a scheduled round trip passenger flight daily between Wuhan and Nanjing. Meng said the flight, which had been in service for five years, had been suffering big losses since 2009. Even after Lucky Air offered up to 80 percent discounts on tickets, the flights were less than half full on nonholidays, according to a previous report. China Southern Airlines had the same experience with flights it offered.

IL
Civil aviation key to jobs and GDP
FAA 11. Federal Aviation Administration, August 2011. The Economic Impact of Civil Aviation on the U.S. Economy. http://www.faa.gov/air_traffic/publications/media/FAA_Economic_Impact_Rpt_2011.pdf
Table 2 summarizes the total impact of U.S. civil aviation on output, earnings and jobs. Economic

activity attributed to civil aviation-related goods and services totaled $1.3 trillion in 2009, generating 10.2 million jobs with $394.4 billion in earnings. Aviation accounted for 5.2 percent of GDP, the valueadded measure of economic activity.

General aviation key to economy

FAA 11. Federal Aviation Administration, August 2011. The Economic Impact of Civil Aviation on the U.S. Economy. http://www.faa.gov/air_traffic/publications/media/FAA_Economic_Impact_Rpt_2011.pdf GA [General Aviation] also made a remarkable impact. While smaller than the impact from commercial aviation, the GA contribution still reflects the industrys unique role i n the nations transportation system. GA operations contributed $38.8 billion to total output. Factoring in manufacturing and visitor expenditures, GA accounted for a significant contribution of $76.5 billion. In the U.S., GA has access to more than 5,178 public-use airports and a significant number of
private airports, making it one of the largest airport users. 36

Aviation and aircraft manufacturing key to economy

FAA 11. Federal Aviation Administration, August 2011. The Economic Impact of Civil Aviation on the U.S. Economy. http://www.faa.gov/air_traffic/publications/media/FAA_Economic_Impact_Rpt_2011.pdf
Table 5 shows the total output, earnings and job estimates by civil aviation activity for 2009. The

two largest activities contributing to output, earnings and jobs are airline operations and visitor expenditures. Civilian aircraft manufacturing, engine and parts manufacturing, and other aircraft parts and equipment contribute a total of $177.4 billion and nearly one million jobs to the U.S. economy. Increased global demand for U.S. aircraft and parts makes this an important part of the manufacturing sector. Visitor expenditures contributed the largest single portion of the total impact by far, with some $597 billion in output and over 5.3 million jobs. Air couriers, airport operations and travel arrangements
round out the rest of commercial aviation, contributing $163.7 billion in total output and supporting just over 1.4 million jobs in the U.S economy. Civil aviation supports job creation and the jobs are highly compensated. Civilian aircraft manufacturings average salary of $51,303 was the highest among the industry followed by the engine and other aircraft parts manufacturers (Table 6). Average salaries for jobs supported by airport operations was nearly $45,000, while jobs supported by air courier and travel arrangements hovered around $34,000. At the lowest part of the spectrum, the average salary for jobs supported by visitor expenditures was $33,550. The jobs induced by visitor expenditures are concentrated in the retail and the service sectors.

Impacts
Economic growth solves poverty
Winters, 2k. L. A. Winters, Professor of Economics at the University of Sussex and former Chief Economist at the Department for International Development. Trade and Poverty is there an Connection? WTO. http://wto.org/english/news_e/pres00_e/pov3_e.pdf Economic growth is the key to permanent poverty alleviation. It is also strongly related to contemporaneous reductions in povertysee, for example, Bruno, Ravallion and Squire (1996) or Roemer and Gugerty (1997). Unless growth seriously worsens income distribution the proportion of the population living in absolute poverty will fall as average incomes increase. The balance of the evidence seems to be that although growth can be associated with growing inequality (or economic decline with narrowing inequality), the effects on poverty tend to be dominated by the advantageous direct effects of growthsee, for example, Demery and Squire (1996) on Africa. This effect also appears to generalize to the very poor
(below $1 per day)Ravallion and Chen (1996) or Bruno, Ravallion and Squire (1996), although, at such very low levels of income, small shocks loom large, and Demery and Squire (1996) find hints of contrary evidence in Africa. In recent work, Dollar

and Kraay (2000) have found that the incomes of the poorest fifth of the population grew one-for-one with GDP per head in a sample of 80 countries over four decades. This was as true of growth induced by openness to trade as of that due to other stimuli. Possibly lying behind these results, but possibly independent of them, is that it is generally easier for the government to raise the resources for poverty alleviating policies if incomes are higher and/or growing.

Aerospace Addons
Aviation industry key to aerospace industry
Conway and Pedersen, 6. Richard S. Conway, Jr., Douglas H. Pedersen, January 2006. Puget Sound Economic Forecaster. THE WASHINGTON AEROSPACE INDUSTRY. http://afawa.com/Aerospace_Industry.pdf Air transportation is a vital function of a modern economy. It entails a variety of activities: aerospace manufacturing, air passenger and freight service, airport operations, air traffic control, air transportation arrangement, and other air support services. Today, including the suppliers of these activities, air transportation employs more than 100,000 people in Washington. This study focuses on the aerospace industry, which accounts for more than one-half of the employment in air transportation: The Washington aerospace industry primarily manufactures aircraft and parts.

Airlines contribute significantly to the aerospace industry

SelectUSA 10. The Aerospace Industry in the United States. http://selectusa.commerce.gov/industry-snapshots/aerospace-industry-united-states. Accessed 7/15/12. The U.S. aerospace industry is the largest in the world and the industry continued to show reasonable strength in 2010 despite the lingering effects of the global economic downturn. In 2010 the U.S. aerospace industry contributed $85 billion in export sales to the U.S. economy. The industrys positive trade balance of $44.1 billion is the largest trade surplus of any manufacturing industry and came from exporting 42 percent of all aerospace production and 72 percent of civil aircraft and component production.

Econ
Aerospace industry key to economy jobs, GDP, and new tech
Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf
We estimate that the

U.S. aerospace and defense industry directly employed 1.05 million workers

in 2010. These workers received $84.2 billion in wages and paid $15.4 billion in U.S. Federal individual income taxes, and $1.9
billion in state individual income taxes. Although not directly in the scope of this study, in addition we found that the Federal government employs an estimated 845,198 aerospace and defense skilled workers at armed forces maintenance and repair depots, National Aeronautics and Space Administration (NASA), Federal Aviation Administration (FAA), other defense agencies including Defense Advanced Research Projects Agency (DARPA) and civilians working at the Department of Defense. We

found the industry has an estimated indirect and induced employment of 2.36 jobs for every 1 directly employed. This employment multiplier is a direct effect multiplier, which accounts for primary and
secondary effect employment associated with the aerospace and defense industry. It does not contemplate final demand, or employment associated with tertiary effect employment well beyond the direct effect of this industrys employment base. Thus, we believe that

indirect and induced employment totals 2.48 million workers, in addition to those cited above who are directly employed. Together with these indirect employees, we estimate the grand total direct, indirect and induced employment associated with the U.S. aerospace and defense industry is 3.53 million jobs, not including industry skilled workers employed by the Federal government or airlines. We estimate that these U.S. aerospace and defense companies generated $324.0 billion in sales revenue in 2010, with $15.6 billion in net income after tax at an average pre-tax reported operating profit margin of 10.5%. This margin percent metric was below average, when compared to other industries in America. These companies paid
$5.5 billion in corporate income taxes on their earnings, as well as $1.7 billion in state income and similar business taxes. Thus together with individual direct employee taxes,

the total industry generated an estimated $37.8 billion in wage and income based taxes to state and Federal government treasuries, not including the taxes paid by indirect and induced industry employment.4 The industry is the largest net exporter, and one of the largest contributors to our nations gross exports at $89.6 billion, with a larger portion made up of commercial aircraft bound for foreign carriers. The industrys contribution to the nations GDP is 2.23%, and as described below, we conclude the industry punches above its weight, when considering other beneficial and qualitative impacts to our economy beyond these metrics. Indeed the industry contributes in ways not directly included in GDP, employment, and taxes paid. Although it has only been 108 years since the Wright Brothers first flight, the industry has contributed fundamentally to the way we live, work, travel and communicate with the technology created and continued innovations in jet aircraft, communications satellites, the internet and Global Positioning Systems (GPS), for example. Also, the industry is primarily responsible for the reduction of casualties in armed conflict due to the technology innovations that keep our warfighters out of harms way with unmanned aircraft, sophisticated surveillance sensors and over the horizon strike capability.

US aerospace industry key to global economy jobs, exports

ITA 11. International Trade Administration, June 21, 2011. AEROSPACE INDUSTRY IS CRITICAL CONTRIBUTOR TO U.S. ECONOMY ACCORDING TO OBAMA TRADE OFFICIAL AT PARIS AIR SHOW. http://trade.gov/press/press-releases/2011/aerospace-industry-critical-contributor-tous-economy-062111.asp

The

U.S. aerospace industry is a strategic contributor to the economy, national security, and technological innovation of the United States, Snchez said. The industry is key to achieving the Presidents goals of doubling exports by the end of 2014 and contributed $78 billion in export sales to the U.S. economy in 2010. During the U.S. Pavilion opening remarks, Snchez noted that the aerospace sector in the United States supports more jobs through exports than any other industry. Snchez
witnessed a signing ceremony between Boeing and Aeroflot, Russias state-owned airline. Aeroflot has ordered eight 777s valued at $2.1 billion, and the sales will support approximately 14,000 jobs. The

218 American companies represented in the U.S. International Pavilion demonstrate the innovation and hard work that make us leaders in this sector, said Snchez. I am particularly pleased to see the incredible accomplishments of U.S. companies
participating in the Alternative Aviation Fuels Showcase, which demonstrates our leadership in this important sector and shows that we are on the right path to achieving the clean energy future envisioned by President Obama. The 2011 Paris Air Show is the worlds largest aerospace trade exhibition, and features 2,000 exhibitors, 340,000 visitors, and 200 international delegations.

The U.S. aerospace industry ranks among the most competitive in the world, boasting a positive trade balance of $44.1 billion the largest trade surplus of any U.S. manufacturing industry. It directly sustains about 430,000 jobs, and indirectly supports more than 700,000 additional jobs. Ninety-one percent of U.S. exporters of aerospace products are small and medium-sized firms.

Aerospace k2 GDP
Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf
We found that the

aerospace and defense industry has a significant impact on the U.S. economy, with direct industry sales contributing 2.23% to national GDP in 2010. This figure differs from other industry citations, such as an FAA citation that the U.S. civil aviation industry contributed 5.2% to U.S. GDP in 2009. As mentioned earlier, the FAAs study had a different scope than ours. For comparison purposes, we analyzed the direct sales to GDP ratios for different industries based on their NAICS codes. As can be seen from Figure 13, the aerospace and defense industry has a nominal GDP contribution higher than the primary metal manufacturing industry. It has a similar level of contribution to the automobile and machinery manufacturing industries. Finally, it has a significantly lower nominal GDP contribution than the health care and chemicals industries. We believe the industry has contributions of significance that are not counted in the GDP numbers and that are worth noting, as described in the following section, entitled, Qualitative and nonquantified contributions.

Aerospace key to US economy

Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf The U.S. aerospace and defense industry has been a leader in its contribution to product innovation, bringing people all over the world into contact with each other with safer and lower cost air travel and communications. It has created the technology that successfully addresses national security and helps defend the U.S. It continues to create marvels of science and technology such as airplanes that turn into helicopters, high definition pictures from space, and remote controlled armed conflict. It continues to create the technology innovations that power the economy with our just-in-time, internet-based commerce. The industry also has a large contribution to the U.S. economy, responsible for fully 2.23% of GDP and 7.0% of exports in 2010, and is the largest net exporting industry in America. 39 With direct, indirect and induced employment of 3.53 million jobs spread over the entire U.S., as well as contributing an

estimated $37.8 billion in tax collections benefiting local communities, state treasury coffers and the federal government, this industry is part of the very fabric of our countrys well -being. Indeed we conclude the
industry punches above its weight, when considering qualitative contributions cited.

Trade
Aerospace key to trade
Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf The industry exported $89.6 billion and imported $47.5 billion in goods in 2010. According to the
Defense Security Cooperation Agency (DCSA), of the $89.6 billion in goods exported in 2010, $31.6 billion were foreign military sales. 14 Figure 11 highlights the contribution of the aerospace and defense industry to the U.S. trade balance in 2010, in comparison with other industries with exports that were greater than $50 billion. Although

the aerospace and defense industry in 2010 was the third highest gross exporter, it had the highest net trade balance, followed by agricultural products.

Trade k2 economy
McTeer, 8. Bob McTeer, former president of the Federal Reserve Bank of Dallas. December 10, 2008. New York Times. The Impact of Foreign Trade on the Economy. http://economix.blogs.nytimes.com/2008/12/10/the-impact-of-foreign-trade-on-the-economy/ Foreign trade has become more important to our economy in recent years. Exports and imports of goods and services have grown rapidly. A growing trade volume benefits our standard of living in several ways, but, as the recession deepens, my focus here will be limited to the impact of the trade balance on Americas gross domestic product and, by implication, its job market. G.D.P and employment generally move in the same directions; so what I say about the impact on G.D.P generally applies to employment as
well. G.D.P., as Ive discussed here before, is the way economists calculate how much an economy is producing in total goods and services. It is usually calculated by adding together several categories of spending, including consumer spending, investment and government spending. Exports of goods and services generate income at home, and so they are also a component of G.D.P. Imports, on the other hand, generate income abroad, so they are subtracted from the other categories of spending to get a more complete picture of how much an economy is actually producing. Higher

exports and lower

imports add to G.D.P., while reduced exports and higher imports contract G.D.P.

Trade solves poverty

Winters, 2k. L. A. Winters, Professor of Economics at the University of Sussex and former Chief Economist at the Department for International Development. Trade and Poverty is there an Connection? WTO. http://wto.org/english/news_e/pres00_e/pov3_e.pdf
In the broadest possible terms, the essay concludes that trade

liberalization is generally a strongly positive contributor to poverty alleviationit allows people to exploit their productive potential, assists economic growth, curtails arbitrary policy interventions and helps to insulate against shocks. The essay recognizes, however, that most reforms will create some losers (some even in the long run) and that some reforms could exacerbate poverty temporarily. It argues, however, that in these circumstances policy should seek to alleviate the hardships caused rather than abandon reform altogether.

Tech
Aerospace k2 tech
Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf Technology innovations, many of which emanated from the U.S. aerospace and defense industry, have played a major part in the economic advancements made in the U.S. in the last century. Often cited are economic developments created out of necessity related to the industrialization of the defense industry
during World Wars I & II, the Korean Conflict, the Vietnam War and the more recent Middle East conflicts in Afghanistan and Iraq.

Game changing technology innovations were created or improved, such as the jet engine, supersonic flight, space flight, radar, communications, direct-to-home television broadcast and GPS navigation satellites, and development of the internet, for example.

Technology key to solve climate change

Hoffert, et al, 2. Martin I. Hoffert, Ken Caldeira, Gregory Benford, David R. Criswell, Christopher Green, Howard Herzog, Atul K. Jain, Haroon S. Kheshgi, Klaus S. Lackner, John S. Lewis, H. Douglas Lightfoot, Wallace Manheimer, John C. Mankins, Michael E. Mauel, L. John Perkins, Michael E. Schlesinger, Tyler Volk, Tom M. L. Wigley. Science Magazine. November 1, 2002. Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet. http://www.sciencemag.org/content/298/5595/981.short Stabilizing the carbon dioxideinduced component of climate change is an energy problem. Establishment of a course toward such stabilization will require the development within the coming decades of primary energy sources that do not emit carbon dioxide to the atmosphere, in addition to efforts to reduce end-use energy demand. Mid-century primary power
requirements that are free of carbon dioxide emissions could be several times what we now derive from fossil fuels (1013 watts), even with improvements in energy efficiency. Here we survey possible future energy sources, evaluated for their capability to supply massive amounts of carbon emissionfree energy and for their potential for large-scale commercialization. Possible candidates for primary energy sources include terrestrial solar and wind energy, solar power satellites, biomass, nuclear fission, nuclear fusion, fission-fusion hybrids, and fossil fuels from which carbon has been sequestered. Nonprimary

power technologies that could contribute to climate stabilization include efficiency improvements, hydrogen production, storage and transport, superconducting global electric grids, and geoengineering . All of these approaches currently have severe deficiencies that limit their ability to stabilize global climate. We conclude that a broad range of intensive research and development is urgently needed to produce technological options that can allow both climate stabilization and economic development.

Security
Aerospace k2 natl security
Deloitte 12. Deloitte LLP, audit, consulting, financial advisory, risk management and tax firm. The Aerospace and Defense Industry in the U.S. A financial and economic impact study. http://www.aia-aerospace.org/assets/deloitte_study_2012.pdf The world continues to demonstrate how dangerous it is and how our civilization and way of life can be put in jeopardy quickly. The surprise attacks on Pearl Harbor and the tragic events surrounding the terrorist attacks of 9/11 have shown our nation how vulnerable it can be. Technology innovations and products developed in the aerospace and defense industry have made our nation safer, from sophisticated sensors that can see nefarious activities of our adversaries, to the bomb and metal detectors that have become ubiquitous at airports around the world, the industry continues to innovate to produce the necessary defenses used to increase our national security. Recent
advances to counter the next generation national security threats include for example, sophisticated software to trace bank transactions of terrorists, advanced listening sensors to eavesdrop on communications of known terrorists, and sophisticated sensors to help discover threats at our airports, borders, and seaports. Of course, the unmanned aerial vehicle (UAV) has been extraordinarily successful in helping to see, then attack if necessary, our adversaries. Lastly, the

specter of a potential cyber-attack on our nations water, power, transportation or communications infrastructure is cause for alarm, and the industry continues to develop the next generation technologies to address these and future threats.

Tourism
Airlines key to tourism, which is key to the economy
OEF, 6. Oxford Economic Forecasting, October 2006. The Economic Contribution of the Aviation Industry in the UK. http://www.oef.com/Free/pdfs/Aviation2006Final.pdf
The tourist

industry makes a large and growing contribution to the UK economy, directly contributing nearly 4% of GDP. Nearly three-quarters of international visitors to the UK arrive by air. Spending by visitors who arrive by air is equivalent to 1.1% of GDP and generates around 170,000 jobs in the UK. Air services also allow UK tourists to enjoy a much wider range of overseas holidays than would otherwise be accessible. Increased air services capacity is likely to be needed if the government is to achieve its objective for the tourism industry to grow by a third by 2010. Tourism makes a major contribution to the UK economy. In 2005 the sector directly generated an estimated 46.8 billion of output, equivalent to 3.9% of GDP, according to OEF/World Travel & Tourism Council (WTTC) estimates. And this activity was responsible for 1.08 million jobs 3.5% of total employment 13 . However, this is just the
direct impact of travel and tourism in the UK. These 1 million+ workers which covers those working at airports, in hotels and restaurants etc do not reflect the full contribution of travel and tourism to the UK economy.

The firms directly involved in providing travel and tourism goods and services spend money in their own supply chains that support more jobs in other industries. This spending filters through the economy into the sectors that provide the travel and tourism industry with the food provided in restaurants, the fuel required to move people around, and a range of business services. Allowing for the spending of the travel and tourism industry
on bought-in goods and services, the total number of jobs directly and indirectly supported amounts to 2.9 million (9.3% of total employment).