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.


 
 

 

Northrop Grumman awarded position on Air Force training systems acquisition III contract

The U.S. Air Force has awarded Northrop Grumman a position on the Training Systems Acquisition III indefinite delivery/indefinite quantity contract to support war fighter training systems at global U.S. Air Force operating locations. Twelve companies have been awarded positions on TSA III, which has a ceiling value of approximately $20.9 billion over 10 years, if...
 
 
Navy photograph

Raytheon and U.S. Navy collaborate to optimize minehunting sonar

Navy photograph The Remote Minehunting System and AN/AQS-20A Minehunting Sonar on USS Independence. Raytheon is working closely with the Naval Undersea Warfare Center — Division Newport to enhance the features of the comp...
 
 

Boston Engineering receives Air Force contract to advance UAV motor control capabilities

Boston Engineering today announced a $150,000 contract from the U.S. Air Force to enhance its UAV capabilities and to also reduce drone noise. Specifically, Boston Engineering will demonstrate an embedded motor control platform to accelerate U.S. Air Force UAV research and development initiatives. Embedded motor controllers underpin critical UAV operations including drone propulsion and sensors...
 

 

Boeing receives $1.49 billion contract for 13 P-8A Poseidon ircraft

Boeing will provide the first P-8A Poseidon maritime surveillance aircraft for Australia and additional P-8As for the U.S. Navy following a $1.49 billion contract award from the Navy for 13 aircraft. The order includes nine aircraft for the U.S. Navy and four Poseidon aircraft for the Royal Australian Air Force, a long-time partner to the...
 
 

Boeing completes 777X firm configuration

Boeing announced Aug. 27 the completion of the firm configuration milestone for the 777-9, the first member of the 777X family to be developed. The Boeing 777X team reached this significant design milestone after working closely with airline customers and key suppliers to optimize the configuration of the new airplane. The 777X family includes the...
 
 

Raytheon to provide training services to U.S. Air Force

The U.S. Air Force has named Raytheon as one of the prime contractors on the Training Systems Acquisition III contract. This allows Raytheon to bid on delivery orders on this multiple award, indefinite delivery/indefinite quantity contract with a total ceiling value of $20.9 billion over 10 years. Under this Air Force Life Cycle Management Center...
 




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>