By Lee Samaha - September 25, 2012 | Tickers: AIR, BEAV, HEI, SPR, BA | 0 Comments

Lee is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.

Sometimes you have to wonder how much more short term the market can be? AAR Corp (NYSE: AIR) had already pre-announced results at the start of the month but when they formally released them the stock was met with a 6% decline and then a 3% rise the next day; this is after raising guidance as well. The results were actually fairly strong, but there was a lot in the details that revealed the underlying trends in the aerospace industry.

Private Sector Good, Public Sector Bad

No, not a eulogy to free market enterprise but a statement of what is currently trending in aerospace. Cuts in public spending and military hardware are reducing end demand on one side. Fortunately commercial aerospace is flying high at the moment and companies with heavier exposure to this side of the industry are benefiting accordingly.

A quick look at Boeings (NYSE: BA) order book reveals that it is filled for years to come. Even more interesting is where the orders are coming from. Here are the airlines that have made more than 20 orders in 2012 from Boeing.

Aside from the large order from United, all of these orders are being driven by budget airlines and emerging markets. In addition, a large part of the leasing company's orders are for operations in the Far East, and arguably Virgin Australia is an Asian carrier. Essentially the marginal growth in passenger miles flown is being driven by emerging markets. Indeed, the fact that commercial aerospace is actually an emerging market play has been one of the best kept investing secrets of recent years.

Read more:

Where is the Aerospace Industry Headed?