Eaton Corp.'s (ETN) aerospace business, one of the company's most resilient segments in the economic downturn, is facing headwinds from foreign airlines paring their aircraft orders.

The Cleveland-based company, which supplies fuel pumps, hydraulic systems and other components to the aviation industry, predicted Monday that its aerospace sales will decline 5% this year from 2008.

"When we look into the aerospace business, the biggest decline that we've seen is on commercial [aircraft] outside of the U.S.," said Alexander Cutler, chief executive and chairman, during a conference call with analysts. "We've seen a more precipitated drop there."

Eaton expects its aerospace sales to foreign end markets to fall by 14% this year, more than double the 6% decline the company forecast in February. Eaton's aerospace sales for U.S. customers, meanwhile, are expected to be flat with 2008.

Eaton, which also produces components for truck and automakers, electrical equipment and hydraulic gear, said Monday that sales across all its business segments will decline by 15% to 16% this year.

Foreign-based airlines, which expanded aggressively to accommodate the growing demand for long-distance air service to developing countries, have scaled back their purchases of jets amid the slowing global economy.

Meanwhile, in the U.S., the private aircraft and regional commercial jet markets are proving to be the most problematic for Eaton.

"The business jet segment has been hit hard," Cutler said.

Demand for business jets has been fallen sharply as executives cut back on travel or opt for commercial flights. The use of business jets also has attracted criticism from the public and shareholders who consider the aircraft an unnecessary corporate perk.

The Aircraft Owners and Pilots Association has launched a marketing campaign featuring actor Harrison Ford to promote the economic benefits of U.S. general aviation. The group fears that negative attitudes about small business aircraft will make it easier for Congress to levy higher fees on small planes.

Eaton continues to be a supplier for Boeing Co.'s (BA) new 787 passenger aircraft, which has seen 32 order cancellations this year so far. Cutler offered no details about the aircraft's maiden flight, which is scheduled for June. Production problems have delayed the aircraft by almost two years.

"We continue to be very well-positioned in that program," Cutler said in an interview after the conference call. "It's a very important program for us."

Eaton's stock traded down 9.68% at $40.42 a share late Monday.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com