U.S. Involvement at Major International Air Shows Principally Depends on Agencies' Missions and Aerospace Companies' Resources
GAO-07-1165R, Sep 21, 2007
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For years, the U.S. government has participated at international air shows, such as those in Paris, France, and Farnborough, United Kingdom, with federal agencies renting exhibit space to present program information, displaying aircraft, or providing assistance to U.S. aerospace companies seeking to showcase their businesses. Hosted by aerospace industry associations and foreign governments, these shows present opportunities for business networking and often serve as forums for announcing billions of dollars in contract awards. While large U.S. aerospace companies are generally well represented at these shows, the ability of small and medium-sized companies to participate is unclear. On the basis of your interest in understanding U.S. government and company involvement at major international air shows, we (1) identified federal agencies' participation as well as their support to U.S. companies at these shows since 2000 and (2) determined what factors affect small and medium-sized U.S. companies' decisions to participate.
Agencies' participation in and support to companies at major international air shows largely depend on the agencies' missions, with such activities funded by operations accounts or fees charged to companies. While the Department of Defense (DOD) is the predominant U.S. agency participant at air shows, its presence is based on whether participation will contribute to its mission of advancing security cooperation, promoting interoperability of weapon systems, and demonstrating commitment to alliances or regions. Typically, DOD displays or demonstrates weapon systems, such as fighter aircraft, or meets with foreign military officials. DOD also provides support to U.S. companies by leasing military aircraft to them for use at these shows on a limited basis. The Department of Commerce (Commerce) is a key provider of support to U.S. companies participating at air shows because of its mission to open new markets and promote U.S. companies' products and services overseas. Commerce's support includes a range of fee-for-service programs, including product literature displays and business-to-business introductions, as well as business counseling services available at no charge. While the Federal Aviation Administration (FAA) and the National Aeronautics and Space Administration (NASA) do not provide support to companies, they occasionally participate at air shows when it may advance a specific agency mission. The State Department provides diplomatic support to federal agencies and facilitates meetings between U.S. companies and foreign officials--activities that the agency normally performs as part of its overseas mission. Because show participation and support are an integral part of agencies' missions, their costs are not budgeted separately from other mission activities. While only DOD and Commerce track direct participation costs, other agencies were able to estimate how much they spend for show participation. All five agencies pay for their costs from operations accounts or from fees charged for company support. For example, in 2005 and 2006, DOD spent approximately $2.4 million from its operations accounts to participate at air shows in Paris, France; Farnborough, United Kingdom; Singapore; Dubai, United Arab Emirates; and Santiago, Chile. Officials we interviewed from small and medium-sized companies identified a number of factors, including cost and sales opportunities, that influence their participation at air shows. One major factor is the high cost of sending employees and materials to international locations. Company officials indicated that their participation, which includes such activities as setting up information booths or establishing business contacts, generally does not result in a direct return on investment. While officials noted that their costs are typically greater than any sales that can be directly tracked to their show participation, they indicated that it is a business decision based on opportunities for promoting name recognition and fostering business relationships. Some companies paid fees to obtain Commerce's assistance at air shows, while others were unaware of Commerce's programs to assist small and medium-sized companies.