Given present trends toward reduced force size and equipment buys, there is some concern about whether the military aircraft industry will be able to respond in an effective and timely manner to the nation's future defense needs. This report identifies and quantifies factors and trends potentially affecting design capability, and develops a conceptual framework for examining possible solutions to the problems identified. It considers whether a radically decreasing business base could force a reduction in industry size, possibly past some threshold required for an effective response to Air Force needs. The findings indicate that there will probably be enough business in the foreseeable future to sustain several aircraft companies in a sufficiently healthy state so that they will choose to remain in the military aircraft design business. However, the authors express concern that the declining experience base of aircraft design teams poses a serious threat to U.S. defense capability. At a minimum, they recommend elevating this issue to a higher level of visibility within the Department of Defense and considering issues associated with design capability as part of acquisition policy and program decisions.