The once poster child of Australian aerospace, Victoria, is dying an uninspired death. The aerospace mantle passed to Queensland.

In 2010 Victoria’s aerospace industry including aircraft, systems and components had an annual export value of $300 million. The sector employed 20,000 people generating nearly $600 million in economic activity. Today it’s influence has waned as sector employment has dropped to circa 18,000 with export values dropping.

Over the past year the industry in Victoria has suffered an exodus of talent to Queensland as a result of government support programmes. JHAS maintenance facility at Melbourne Airport has closed, Qantas has wound back it’s Tullamarine 737 maintenance base and closed Avalon 747 heavy maintenance, and Boeing Aerostructures is winding back its workforce at Fisherman’s Bend. Jetstar services to Avalon were only retained after the Victorian Government through in substantial financial support to subsidise marketing and operations over the coming five years.

In an attempt to kick-start the turnaround, the Victorian Government has introduced innovation grants of $30K each with a total pool of $500K to kick start projects. These are business grants, none are available to aviation research projects at universities.

The grants, according to Minister for Aviation Industry Gordon Rich-Phillips, are designed to promote aviation research projects assisting companies to engage with international aviation markets and global supply chains. Australia is an aviation minnow. In a global industry which invests billions of dollars annually in R&D, $30K is really very little to spend on single projects in the hope of kick starting something bigger.

Gordon Rich-Phillips suggests “the aviation sector has already identified a number of areas which would benefit from industry research such as productivity, aircraft development, airport management and maintenance, repair and overhaul. Projects could also focus on pilot training and human factors, air safety and air traffic control, and new technologies for the development of future aircraft.”

These are all valid and decidedly important areas of research. As a point of comparison Airbus spent $2 billion on R&D in 2012. Worldwide spend on a new frontier in aviation – UAVs – is estimated to be $2.9 billion per year for the next 10 years. Textron, owner of Cessna, last year increased Cessna’s R&D budget by 30% to USD$200 million. The US Government budgeted $160 million for R&D in the American ATC system in 2013. The Victorian Government’s provision is small, incomparable change.

I don’t discourage Australian Government – Federal or State – spending in aviation R&D particularly in these austere times.

Victoria has the potential to be a global aerospace player, but an ill thought out $500K thrown at a dying industry is a bandaid for an AK47 wound.

The 2013 EU Industrial R&D Scoreboard compiles a comprehensive list of aviation and travel R&D spend.

A previous Carry-on commentary on aerospace opportunity in Australia.