Business

July 9, 2012

Airbus, Boeing airplane production rates straining supply chain

Airbus and Boeing are gearing up to roll out large commercial jetliners in ever-increasing quantities over the next 10 years, according to a new report from Forecast International, but will component suppliers be able to keep up with demand?

Forecast International’s newly released “The Market for Large Commercial Jet Transports” projects that 14,655 large commercial airliners will be produced in the 10-year period from 2012 to 2021.

The Connecticut-based market research firm estimates the value of this production at $2.04 trillion in constant 2012 U.S. dollars.

Airbus and Boeing, the two dominant manufacturers in the market, are implementing production increases, and are considering additional increases for the future. However, determining how fast and high to increase production is a tricky proposition for the two companies. In addition to the vulnerability of their supply chains, another concern is the overall health of the airline industry.

The desire of Airbus and Boeing to expand production is putting a considerable strain on their suppliers, especially in light of ongoing global economic sluggishness and uncertainty. In such an environment, a number of suppliers may be unable or even unwilling to support continual production increases. Adding to the pressure on suppliers is the fact that Airbus and Boeing are shifting their focus from manufacturing to integration, and are looking to outsource more design and production responsibilities. According to Forecast International Senior Aerospace Analyst Raymond Jaworowski, “The potential for bottlenecks among suppliers means that Airbus and Boeing need to tread cautiously when it comes to future production increases.”

A second major concern is the health of the airline industry. Air traffic is growing, and the industry as a whole is profitable. Still, many individual airlines are experiencing financial difficulties, including some carriers that have hundreds of orders on the books for new aircraft.

At the same time, Airbus and Boeing have considerable incentive to keep production rates high and growing. The two companies hold large numbers of unfilled orders, but this means long waiting times for customers to take delivery of their aircraft, which often results in considerable frustration for these customers. A lack of early delivery slots could also tempt potential buyers to take a serious look at new aircraft emerging from manufacturers outside of the Airbus/Boeing duopoly. Such aircraft include the Bombardier CSeries, the COMAC C919, and the Irkut MC-21.

With an eye on this new competition, Airbus and Boeing have launched development of new, re-engined versions of their narrowbody airliner families. The Airbus A320neo series and the Boeing 737 MAX family will battle each other for the lion’s share of the narrowbody market.

In the widebody segment of the large airliner market, the new Boeing 787 entered service in 2011. The Airbus response to this new aircraft is the A350 XWB, which is currently scheduled to enter service in 2014. The A350 is also aimed at the popular Boeing 777, with the result that Boeing is looking at ways to upgrade the 777.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines August 28, 2015

Business: Rafale, Mistral on agenda for Le Drian in Malaysia, India – French Defense Minister Jean-Yves Le Drian is due to visit Malaysia Aug. 30, with talks expected to cover the Rafale fighter jet and Mistral helicopter carrier, website La Tribune reported. U.S. Army to choose new landing craft next year – In line with the Pentagon’s...
 
 

News Briefs August 28, 2015

Boeing plans to lay off some Southern California workers Boeing has announced that it plans to lay off employees at its Southern California-based satellite division. The Los Angeles Times reports that the aerospace giant said Aug. 25 that it will lay off as many as several hundred employees at the El Segundo factory. Boeing says...
 
 

Special tactics Airmen killed in hostile incident

Two special tactics airmen, who were deployed in support of Operation Freedom’s Sentinel, were killed near Camp Antonik, Afghanistan, Aug. 26. Capt. Matthew D. Roland, 27, and SSgt. Forrest B. Sibley, 31, were at a vehicle checkpoint when two individuals wearing Afghan National Defense and Security Forces uniforms opened fire on them. NATO service members...
 

 

Hurricane Hunters to fly Tropical Storm Erika

The Air Force Reserve Hurricane Hunters are operating out of Homestead Air Reserve Base, Fla., flying their state-of-the-art WC-130J Super Hercules into Tropical Storm Erika in support of the National Hurricane Center in Miami. The 53rd Weather Reconnaissance Squadron flew four missions into the tropical storm from their deployed location at St. Croix in the...
 
 
LM-MUOS

U.S. Navy, Lockheed Martin ready to launch MUOS-4 Aug. 31

The U.S. Navy and Lockheed Martin are ready to launch the fourth Mobile User Objective System secure communications satellite, MUOS-4, from Cape Canaveral Air Force Station, Fla., Aug. 31 aboard a United Launch Alliance Atlas V...
 
 

Pentagon probing alleged distorting of war intelligence

The Pentagon’s inspector general is investigating an allegation that the military command overseeing the anti-Islamic State campaign distorted or altered intelligence assessments to exaggerate progress against the militant group, a defense official said Aug. 26. The official was not authorized to discuss the probe publicly and so spoke on condition of anonymity. The investigation was...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>