that it is not a sunset industry, and that significant advances are possible that have potentially high payoffs. We in the industry never believed that we were in a sunset industry. Further, the report stated that the Government should take a major role in aeronautical R&T.

Integrating advanced technologies, the report stated, could produce more than a 50-percent increase in fuel efficiency for large military and civil transport aircraft, and more than a 30-percent reduction in direct operating costs. Even if only a small part of this were to be realized, the benefits would be enormous.

For example, the U.S. airlines industries' fuel consumption, if it were reduced by 5 percent, would save about $500 million annually. This figure exceeds the annual profit of the U.S. airlines for 12 of the last 15 years.

Although fuel prices have decreased recently, there is a real danger in becoming complacent in assuming that this trend will continue, and that further advances in technologies that save fuel will become less important. Our Nation will continue to be dependent on oil for many years, and much of it will have to be imported from politically unstable areas. We must continue our efforts to reduce fuel consumption in both military and commercial aircraft. Further, the OSTP report pointed out that military aircraft can incorporate improved survivability features and achieve substantially greater mission effectiveness and provide greater range. Increased payloads, civil and military rotorcraft are possible with 100 percent speed and range increases, and the potential gains that they list goes on and on. And we agree. Never have we in the industry been more confident in the future possibilities in aviation. Therefore, aeronautics is a fine example of the high technology that the Government seeks to encourage and should encourage. To move a proposed vehicle from concept to fruition is costly and often requires a long period of time. Development of a new commercial engine or airplane costs billions, certainly in combination, billions; often, more than the net worth of a company.

The company, with this large investment, must employ technologies that entail relatively modest risk, even to the extent of foresaking some technologies with potentially greater benefits. Development of technologies of high risk and long development timespans is an area where the Government can and should take the lead if this country is to retain its prominent position, vis-a-vis foreign competition, which does involve various forms of government support.

All companies can benefit from work that NASA and DOD perform. One of the greatest problems in the industry today is the need to slow the tremendous increase in both the development cost and the recurring cost of aircraft. There are many studies today that show that the military cannot afford that which is already on their plate. The costs are escalating too rapidly. Work done by NASA will mitigate this rising cost by assuring technology readiness through proof of concept work.

It is also necessary for us to state that ever since NACA, NASA's predecessor, was founded, there has been an excellent Government laboratory-industry relationship that resulted in aeronautical technology development that has produced outstanding aerospace prod

ucts and provided many national benefits. We in the industry have a great respect for NASA, it programs, and its personnel. We believe that it is one of the best-run agencies in the Government. NASA requests industry recommendations on R&T development through several advisory committees, and these are largely reflected in the NASA programs we are discussing today.

Now, with respect to our more specific consensus comments. First, we wholeheartedly endorse the OSTP aeronautical research and technology policy. This panel considers it an excellent and comprehensive report, and commends the members of the working group for their recognition of the high value of aeronautical research.

Basically we support the general thrust of programs NASA has proposed. We would prefer to see a higher level aeronautical budget, although we recognize that in government, as in industry, resources are limited.

Our main point is, however, it does not appear that the funding is consistent with the goals of the OSTP aeronautical R&T policy. We as a whole believe the funding should be increased by a minimum of 20 percent, or approximately $60 million. In the current plan-there is almost total abandonment of some systems technology research programs, particularly in the areas of subsonic aircraft and advanced propulsion. We feel that the system's programs are vital to provide the focus and guidance for an aggressive R&T base and should not be sacrificed. In both 1981 and 1982 the Congress did provide needed additional augmentation. We as a group hope you can do this again.

Just a note. It is interesting that just a sliver of the space budget could do wonders for aeronautics research.

We, the industry, are disappointed in the support given to the structures and materials area. Enhanced funding should be considered for primary composite structures; a technology that offers the possibility of reducing both fuel consumption and also, the unit costs.

Laminar flow control is an excellent example of a technology offering great promise, but one which the industry cannot pursue adequately on its own because of the large risk. It is a natural role for NASA to perform research in such a high risk technology, but LFC has, unfortunately, been zeroed in the 1984 budget.

The advanced turboprop or propfan offers good potential in both the military and civil sectors. ÑASA should continue this work, but we fear that the funding is inadequate to maintain the pace required to capture many of its potential markets. It has application in military derivative aircraft, as well as good potential in the short-range commercial marketplace and most of our commercial aircraft fuel is consumed at the very short ranges.

Funding for advanced turbofan propulsion system technology work should be enhanced. The powerplant is the key to new aircraft development. Without it, it is highly unlikely that any company will commit to new civil aircraft or the military to new tactical aircraft. Many of the improvements in today's aircraft have been the result of advancements in the powerplant technology.

Further, all but one of the members of our panel believe that if NASA is unable to obtain additional funds, some change in the dis

tribution of funds may have to occur. For example, they believe that the numercial aerodynamic simulation research is very important, and will eventually provide needed understanding of complex flow fields, but suggest that the 1984 expenditure may be slightly too aggressive if additional funding cannot be obtained. We all hope, of course, that the additional funds can be provided without this reduction.

These, then, were the areas of agreement, and it is obvious that we, the industry, have very common concerns and views.

In summary, never before in our industry have we been more confident that our Nation's future in aeronautics has the possibility of moving ahead at an even more rapid pace. But the industry cannot do it alone. Government and industry must each play a role in this necessary partnership. Aeronautics must not become another industry that suffers decay because of foreign competition. We cannot change the rest of the world; we must accept the fact that in virtually all other industrial nations, a marriage has taken place between government and the aerospace industry. We must take stronger measures to enhance the aeronautical research base of our Nation.

We in the industry note that the OSTP report made a clear call for increased aeronautical R&T, but this country's investment in aeronautical R&D as a percent of sales has been dropping steadily over the past decade. In the meantime, foreign aeronautical development, both friendly and hostile, has been steadily increasing. Foreign commercial wide body transports are accounting for a substantial portion of the market. Soviet military aircraft development has continued unabated.

If we are to avoid losing transport manufacturing jobs to the Europeans and the Japanese and maintain the other national benefits that result from a leadership role in aeronautics, we must increase our support of aeronautical research and technology. Fortunately, there is much synergism between civil and military aeronautical R&D. Both sectors will benefit from expanded research.

As we have stated and as the OSTP study affirms, industry cannot on its own provide this leadership role. It needs Government support, particularly for the long-term, high risk technology programs. We believe that the industry and NASA working together, with increased congressional support, can maintain our preeminence in aeronautics.

Thank you very much for giving us the opportunity to express our thoughts and concerns. And now I will ask Mr. Roger Schaufele to make his statement, which will be followed by that of Dr. Shank. Thank you.

Mr. SCHAUFELE. Mr. Chairman, and members of the subcommittee, my name is Roger Schaufele, I am vice president of engineering of Douglas Aircraft Co., a component of McDonnell Douglas Corp. It is an honor and a privilege to be able to present to you today our comments on the NASA aeronautics program as proposed for fiscal year 1984.

We are heartened by the fact that the executive branch of the U.S. Government is willing to increase the NASA aeronautics budget for fiscal year 1984 to some $300 million, up 7 percent from

fiscal year 1983, and to do this in this year of severe budget pres

sures.

Competition for the free world civil air transport business is becoming fierce, as foreign governments recognize the benefits to their society from the high technology air transport industries, and establish goals and provide the resources to secure increased shares for themselves. U.S. industry is being hard pressed to maintain its historical dominance of these markets. NASA has a unique role to play in this international competition, and it is our desire to assist them in every way possible to realize the maximum benefit for the United States, and that is what we would like to address for you here today.

This concern, as well as a number of related issues, were evaluated by a multiagency governmental study group under the chairmanship of the Office of Science and Technology Policy in the Executive Office of the President, an we want to publicly support their recommendations.

They confirmed the importance of aeronautics to national defense and to the national transportation system, and recommended a continuation of the Government's role in aeronautical research and technology to insure the timely provision of a proven technology base to support future development of superior U.S. aircraft and a safe, efficient and environmentally compatible air transportation system.

The study group noted that the aircraft industry is a major U.S. enterprise. It noted that a major factor influencing the future prospects for U.S. manufacturers is the sustained development and availabilty of new and advanced technology. Our technology assessments at McDonnell Douglas convince us that there are large potential payoffs still available from aeronautical research and technology efforts, spanning the full range of NASA activities from fundamental knowledge gained through basic research to the proof of concept or technology validation stage, so critical before applications can be considered for future military or civil aircraft applications.

We believe NASA has a unique capability and a unique responsibility in the area of technology validation, and it is in this area that we believe the fiscal year 1984 NASA program should be strengthened. We do not want to address the R&T base here today, but we do want to say that we believe NASA needs to reestablish systems programs as it is in this area where NASA may make its greatest contribution through the mechanism of multiple technology programs, cooperatively and continuously pursued.

Several key system areas have been identified as having high potential payoff in the downstream years, which represent programs that are too high right, too long in return of capital or are too expensive for industry to do alone. This is where NASA's systems activities are needed to keep this country competitive. Previous NASA efforts have done much in developing the base research and technology in many areas, and work has progressed to the point where industry, in cooperation with NASA, has begun to invest its limited research funds in support of several of these proof-of-concept systems programs.

Some of the NASA systems programs have been outstanding successes in the past and have given the latest U.S. civil transports dramatic improvements in fuel efficiency. Many of these programs show promise of even further improvements and need to be continued. Specifically, the systems programs we endorse and which should be included in the NASA aeronautics program for fiscal year 1984 are:

The subsonic aircraft systems which includes composite wing primary structures, deserves our highest priority; laminar flow control, which should be funded to continue the successes demonstrated to date; active controls, and supercritical wing and configuration integration aerodynamics should also be funded.

Advanced propulsion systems which includes the advanced turboprop program should be funded in fiscal year 1984 to insure realization of an early flight research program, as well as continuation of the successful energy efficient engine and advanced turbofan effort.

Reinstitution of an advanced metals and structures systems program which offers a broad range of potential benefits. This program should include metal matrices, advanced lithium aluminums and advanced metals that are just now emerging from the laboratories.

As noted previously, the foreign government-industry technical community has established R&D programs in many of these key areas in an attempt to get ahead of the U.S. industry on future product offerings. We must maintain a momentum in aeronautics, and we look to NASA to help guide us.

These are the principal areas that we wanted to address today. I want to thank the committee for giving us the honor and privilege of being able to focus on these systems studies activities here for you this morning. Thank you.

Dr. SHANK. Mr. Chairman, I am Bud Shank, director, Engineering-Technical, Commercial Engineering, Pratt & Whitney Group of United Technologies Corp. I want to thank the committee on behalf of United Technologies for this opportunity to share with you our views on the administration's budget request for NASA's aeronautics program. I have a very brief statement that will address particular aspects of the propulsion arena of the aeronautics budget.

My distinguished colleague, Mr. Hopps, has said that the powerplant is the key to new aircraft development. I would point out that powerplant development leads the airframe by 1 to 2 years, depending on circumstances. Yet, if one looks at the NASA budget under the heading "Systems Technology Programs," the item "Advanced Propulsion Systems Technology" proposed for fiscal year 1984 is zero. This is distinctly different from prior years.

I should like to discuss in a little more detail some of the possible consequences of this. For example, foreign manufacturers are already pursuing turboprop aircraft. The French are already in the fourth year of their own advanced propfan program with a test of a propfan model planned for 1984 and 1985. The Russians have predicted and are predicting that propfan Soviet aircraft will enter service in the 1990s, at the same time or even before the West manages to put a propfan into service.