IN FOCUS: Aerospace supply chain put under strain

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 Boeing

Dreamliner supply-chain problems forced a rethink at Boeing

The fundamentals, as we are repeatedly reminded, are sound: Airbus-Boeing order backlog at record levels, global air travel demand growing strongly, airlines in urgent fleet renewal drive to exploit latest fuel-saving technologies.

To underscore the positive story, the global aerospace industry posted its best year ever in 2011, despite pressure on European and US defence spending: record revenue ($677 billion), record operating profit ($60 billion), record deliveries (1,000-plus from Airbus and Boeing), record mergers and acquisitions volume (341 deals worth nearly $44 billion).

Speaking in his capacity as vice-president of the aerospace section at the UK's ADS industry group, GKN Aerospace chief Marcus Bryson said in the run-up to Farnborough air show: "It's a great time, particularly on the civil side." But he adds a warning: "If you've been in this industry a long time you know not to get carried away by the euphoria." Three decades in the business tell him to take the full orderbooks with a pinch of salt. Airline profitability is weak and the 2008-2009 financial crisis hangs over an economic landscape suffering as US recovery is called into question. Meanwhile, Europe struggles with a currency and debt crisis and even China shows worrying signs of slowdown. So, Bryson notes, it would be unwise to dismiss warnings that the financial sector may not be eager or able to supply enough money to pay for all those aircraft scheduled to roll off the assembly lines...

 

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