Demand for aircraft is on the rise, but the supply chain hasn’t quite adjusted to these additional needs. In particular, Boeing and Airbus, the two largest airplane manufacturers in the world, have been struggling to meet heightened demand. This is largely due to the fact that many of their suppliers have been unable to deliver parts in a timely manner.
More specifically, engine manufacturers are reportedly to blame for various delivery issues. In fact, Rolls-Royce Holdings projects that the company will be 50 engines short of the 550 it intended to deliver to Airbus and Boeing for the year. Production problems with Airbus’ Trent 7000 engine, which goes into the A330neo widebody, have held up engine deliveries as well. Other leading manufacturers, such as Pratt & Whitney and GE, have also been unable to deliver on time. Regardless of these specific issues, though, Boeing says that the company expects engine deliveries to be on schedule by the end of the year.
Engines aren’t the only issue, though. Fuselage, wing, and other crucial part deliveries have also been subject to delays due to the sheer scale of production required to meet heightened demand. There is also a shortage of capable personnel in the industry.
Airbus has seen missed deadlines due to a struggling supply chain, and though Boeing has yet to miss delivery, they are running behind on production.
Rising Demand for Aircraft
Demand for new planes is high and still rising. The order backlog for new aircraft is said to be nearly 10 years long, according to the Center for Aviation. The fleet grew by 4% in 2017, and increased demand has carried over into 2018. Overall, Boeing and Airbus are expected to deliver 1,600 planes this year, which is twice as many as the two companies finished in 2000.
Boeing attributes the increased demand to replenishment of fleets in Western countries and rising demand in Asia, but there is a combination of factors responsible for the heightened demand, driving the industry to new production highs.
For one, air travel is on the rise. Airlines need more planes to meet consumer demand, and the increased demand for air travel means that airlines are doing well financially. In turn, this financial stability has made them more willing to invest in new fleets. High oil prices are also a driving force behind the increased demand for new, more fuel-efficient planes.
Other Key Issues
The United States’ involvement in the global trade war may eventually have an impact on aircraft production and the ability of suppliers to meet demand. So far, tariffs haven’t affected supplier capacity or material availability, but manufacturers are now working to nullify any potential impacts down the road. There’s certainly reason for concern: China buys one-third of Boeing’s output of their top-selling 737.
The trade war could also affect the ability of suppliers to access raw materials. If demand for aircraft continues to increase, the world’s output of metal may simply not be enough to fuel production.
How Aircraft Companies Are Responding to Increased Demand
Boeing and Airbus have taken action to help their supply chains meet this heightened demand. Both companies have reached down the line to ensure that their suppliers have the tools needed to meet expectations. For example, Boeing has provided performance-monitoring technology to help suppliers ramp up production, and Airbus is working to balance their production based on suppliers’ outputs.
And as aircraft manufacturers struggle to meet increased demand, airlines themselves are being forced to keep older planes that would normally be retired, even pulling old planes out of storage and preparing them for service.
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