August 10, 2006
By Ken Vandruff

Terrorism Plot Should Not Impact Aircraft Orders

Aviation industry analysts predict no impact on commercial aircraft orders after the announcement that British authorities broke up a terrorist plot to bomb airliners bound for the United States.That prediction will depend on the reaction to the traveling public to tighter security restrictions and longer waits to board airline flights.

"If the public wishes to decide, 'We're going to Disney World whether Osama bin Laden wants me to go or not,' if that's how America responds then it will have no affect whatsoever on orders," says William Alderman, founder and president of Alderman & Co., an aerospace and defense investment banking firm.

British authorities arrested 21 suspected terrorists, including suspected ringleader, who supposedly wanted to blow up airline flights from England to the U.S. Had the plot been successful, it could have made a significant impact on air travel and possibly led to cancellation of aircraft orders, says Paul Nisbet, aerospace analyst with JSA Research Inc. "I think the threat of terrorism has been taken into consideration by those who travel and this is just another indication that it's real," he says. "I think most people recognized it before yesterday."

Impact on commercial aircraft orders would directly affect Spirit AeroSystems Inc. of Wichita. The company builds major assemblies for the Boeing Co. (NYSE: BA) in its Wichita facility. Spirit's factories in Scotland and England build subassemblies for Airbus.