Supply chain issues lead to lower orders for Boeing, Airbus

FARNBOROUGH, England — The huge orders for hundreds of aircraft that have characterized recent years were absent from this year’s biggest air show. Boeing and airbus While responding to production fluctuations caused by the epidemic, increase aircraft production.

Analysts say many of the problems, particularly training new workers, will take years to resolve, meaning airlines, suppliers and the manufacturers themselves will face lingering headaches and a shortage of new, more fuel-efficient aircraft.

“The supply base and the airlines are right to feel that we haven’t met our commitments in terms of timeliness and predictability,” Ihssane Mounir, Boeing’s senior vice president of global supply chain and manufacturing, said last week at the Farnborough Air Show outside London. “So, obviously people are starting to do their own planning, their own post-mortems.”

Production roadmaps for the coming months will be unveiled this week, when Airbus reports quarterly results on Tuesday and Boeing on Wednesday. Wall Street analysts expect Boeing to report another loss in the second quarter and possibly the next. Airbus has already cut its delivery targets for this year.

Boeing had 96 orders and commitments, including previously agreed sales, at the show, which ended on Friday, while Airbus had 266 orders, according to consultancy Ishka, well below the 826 it received at last year’s Paris Air Show, which alternates between Paris and Farnborough.

The most prominent of these are Korean Air’s orders Up to 50 Boeing wide-body aircraft can be ordered, including the 777X, which Boeing is working to obtain certification from regulators. The airline has also ordered Airbus A350-1000 jets. As both manufacturers struggle with production pressures, Korean Air CEO Walter Cho quipped during the Boeing order signing: “Whoever arrives first will become our flagship, no matter who is on time.”

Orders were sluggish during the show as both manufacturers’ narrow-body jets, such as the Boeing 737 Max and the Airbus A321neo, have been sold out for much of this century and beyond. Boeing’s total order backlog is close to 5,500 aircraft, while Airbus’s is more than 8,000. Many airlines United Airlines As the travel industry rebounds during the pandemic, Air India has also increased its new aircraft orders.

Boeing’s presence at the air show was particularly low-key – it did not bring any commercial aircraft for flight demonstrations, but instead focused on safety. crisis and Manufacturing ProblemsArlington, Virginia-based Boeing is trying to increase production of its flagship Max aircraft to about 38 per month, and investors this week will be looking for clues about when those goals can be achieved.

Airbus unveils its new ultra-long-range narrow-body aircraft Airbus A321XLR,Right now Certified by European regulatory authorities A few days before the show.

Air show visitors usually get to see fleets that will fly for decades, but this year most in the industry are focused on production volumes over the next few months.

Shortages of parts range from landing gear to engine components such as high-pressure blades. The interior structure of the cabin is becoming more and more complexLike premium seats, planes are in short supply, slowing production, preventing airlines from getting more fuel-efficient planes and angering some executives.

Airbus is taking a more hands-on approach than before, deploying more than 200 supply chain engineers among suppliers, said Christian Scherer, chief executive of Airbus’ commercial aircraft business.

“Whether the industry is in a boom or a slowdown, we don’t want to see a situation in the future where the supply chain doesn’t believe what we say,” Scheller told reporters before the show.

Airbus said last month it was cutting its aircraft delivery targets for this year and said it would slow a planned production increase, citing “ongoing specific supply chain issues mainly in engines, aerostructures and cabin equipment”.

Meanwhile, Boeing is struggling to recover from a safety crisis caused by a door plug that burst in January and a series of manufacturing defects that have slowed production, in addition to supply chain issues.

The pandemic has caused a plunge in air travel and has caused skilled workers to be laid off or retire early, impacting production of new aircraft. Manufacturers now need to train new workers, a major challenge.

“I think this is going to be a three- to five-year issue,” said Kevin Michaels of AeroDynamic Advisory, an industry consulting firm. “Wages have to be realigned to make this industry more attractive to workers.”

Boeing’s Munir acknowledged that lower wages were a problem further down the supply chain and said Boeing itself should invest in employee training.

“There’s no question about it,” he said. “I don’t expect these smaller suppliers who are critical to the ecosystem to shoulder this burden. We have to do it ourselves at a higher level, again leveraging our balance sheet. It will pay off.”

Delphine Buzzard, head of supply chain and digital operations at Airbus Industrial, said it takes more time to train new aerospace employees like “bakers, butchers and people who work in very different areas of the business.”

Michaels of AeroDynamic Advisory predicts that in the U.S., more aerospace jobs will eventually move overseas, “to where the labor is plentiful.”

Correction: The most prominent of these is Korean Air’s order for up to 50 Boeing wide-body aircraft. An earlier version misstated the name of the airline.