Boeing and Airbus orders dampened resulting from supply chain problems

FARNBOROUGH, England — The biggest air show of the yr was devoid of the large aircraft orders which have numbered within the a whole bunch in recent times. Instead, the main target was on the issues at Boeing And airbus ramping up aircraft production while coping with the aftermath of the pandemic, which was marked by fluctuating production.

Many of those problems, particularly training recent employees, will take years to resolve, analysts say, meaning ongoing frustration for airlines, suppliers and the manufacturers themselves – and a shortage of latest, more fuel-efficient aircraft.

“It's a legitimate opinion from suppliers and airlines to say we haven't met our commitments to them in terms of on-time delivery and predictability,” Ihssane Mounir, Boeing's senior vp of worldwide supply chain and manufacturing, said last week during a panel discussion on the Farnborough Airshow outside London. “Of course, people start making their own plans and raising their own doubts.”

A roadmap for production over the following few months might be available this week when Airbus reports its quarterly results on Tuesday, followed by Boeing on Wednesday. Wall Street analysts expect Boeing to post one other loss within the second quarter and possibly the next quarter. Airbus has lowered its delivery targets for the yr.

At the show, which ended on Friday, Boeing recorded 96 orders and commitments, including sales that had already been made but were now confirmed. Airbus recorded 266 orders, in line with a count by the consulting firm Ishka, far fewer than the 826 orders in the course of the Paris Air Show a yr ago. Paris and Farnborough alternate hosting the Expo every year.

Of particular note is Korean Air's order for as much as 50 Boeing wide-body aircraft, including the 777X, for which Boeing is currently searching for regulatory approval. The airline has also ordered Airbus A350-1000s. With each manufacturers scuffling with production bottlenecks, Korean Air CEO Walter Cho quipped when signing the Boeing order: “Whoever comes first will be our flagship, whoever is on time.”

The subdued order numbers in the course of the show are resulting from the proven fact that each manufacturers have largely sold out their narrow-body aircraft similar to the Boeing 737 Max and the Airbus A321neo for many of this decade, if not longer. Boeing has a complete order backlog of virtually 5,500 aircraft, while Airbus has ordered greater than 8,000. Many airlines from United Airlines Air India has also placed orders for brand spanking new jets as travel has revived in the course of the pandemic.

Boeing's presence on the air show was notably modest — the corporate didn’t bring any of its industrial aircraft for flight demonstrations, focusing as a substitute on its safety crisis and manufacturing problems. Boeing, based in Arlington, Virginia, is attempting to increase production of its basic Max planes to about 38 a month, and investors might be looking this week for clues about when those goals is perhaps met.

Airbus unveiled its recent long-range narrow-body aircraft, the Airbus A321XLR, which had been certified by European regulators just days before the show began.

Typically, air show attendees get a glimpse of fleets that can fly for many years, but this yr the industry was largely focused on production over the following few months.

There are also shortages of parts – from landing gear to engine components similar to high-pressure blades to increasingly complex cabin interiors similar to those with premium seats – which have slowed production, deprived airlines of more fuel-efficient aircraft and, along the best way, angered some executives.

Airbus is taking a more practical approach “than ever before” and is employing greater than 200 supply chain engineers at suppliers, said Christian Scherer, head of the European manufacturer’s industrial aircraft division.

“We do not want to experience again in the future that the supply chains do not believe us, regardless of whether we are experiencing an upturn or a slowdown in this industry,” Scherer told reporters ahead of the trade fair.

Airbus announced last month that it could lower its goal for aircraft deliveries this yr and decelerate the planned increase in production. The company cited “ongoing specific problems in the supply chain, particularly for engines, aircraft components and cabin equipment” as the rationale.

In addition to provide chain problems, Boeing can also be scuffling with the protection crisis stemming from a door stopper failure in January and a series of producing defects which have led to production delays.

The lack of expert employees who were either laid off or opted for early retirement in the course of the Covid-19-induced collapse in air travel has affected the production of latest jets, leaving manufacturers to coach recent employees – a serious challenge.

“I think this is a problem that will drag on for three to five years,” says Kevin Michaels of industry consultancy AeroDynamic Advisory. “Wages need to be adjusted to make the industry more attractive to workers.”

Boeing's Mounir acknowledged that lower wages in lower supply chains were an issue and said Boeing itself should spend money on training its employees.

“There's no question about that,” he said. “I don't expect these smaller suppliers, who are essential to the ecosystem, to be able to carry that burden. We have to do it ourselves at a higher level, leveraging our balance sheet. It will pay off.”

Training employees similar to “bakers, butchers and people who work in a completely different business area” who’re recent to the aerospace industry takes more time, says Delphine Bazaud, head of commercial supply chains and digital operations at Airbus.

Michaels of AeroDynamic Advisory predicted that within the case of the United States, more work within the aerospace industry will ultimately be moved overseas, “to places where labor is available.”