Abstract : The aircraft industry is continuing its recovery from the devastating effects of 9/11 and the associated economic slow down. As the airline companies prepare to buy new Boeing and Airbus passenger jets, they remain under intense pressure to cut costs in order to remain profitable, forcing aircraft and engine manufacturers to adopt austere measures. While airlines have seen improved financial statements, the recent increases in fuel costs have continued to limit profitability for most airlines. In contrast, defense expenditures have seen continued strength from heightened security concerns and developing technologies such as unmanned air vehicles and systems (UAVs/UASs). While UAVs are currently a small fraction of the overall aircraft market, they hold great promise for innovation in both military and civilian applications. The U.S. is still the dominant player in the fighter/attack sector with the development of the Joint Strike Fighter (JSF) and the F/A-22 Raptor. In the rotorcraft sector, European firms have penetrated the U.S. commercial market with technologically superior helicopters; they are similarly poised to do the same in the military market. The only innovative U.S. design is the tilt-rotor aircraft, which has been in development for 20 years. However, despite these challenges the U.S. aircraft industry is sufficiently robust and healthy to meet current and future strategic needs.