Spirit AeroSystems launches development review after posting latest charge

Washington DC
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Airframe and structures supplier Spirit AeroSystems has launched a comprehensive review of development programmes on a variety of Airbus and Boeing programmes as it reported another forward-loss related to unexpected cost increases on the Boeing 787 wing.

Newly-appointed chief executive Larry Lawson says the review will cover the company's four manufacturing sites working on elements of the 787, Airbus A350, Gulfstream G280 and G650 and Sikorsky CH-53K programmes.

Spirit AeroSystems won major positions on each of the programmes, but has struggled to manage development costs on all of them. The latest forward-loss charge of $15 million comes in the first quarter on the 787 wing. That follows a $590 million forward loss reported by Spirit AeroSystems in the third quarter last year.

In recent months, Spirit AeroSystems has also been forced to defend itself from complaints by Airbus executives that it is not performing up to expectations on assembling the Section 15 centre fuselage on the A350.

"Going forward, our goals are to focus on core programme growth, including investing in core product innovation, improving costs on development programmes, successfully executing the 787 and A350, and creating value from customer diversification as we position Spirit to benefit significantly from the record demand for our products," Lawson says.

Despite the first quarter forward-loss, Spirit AeroSystems' financial results improved year-on-year in the first quarter. Operating income increased 18% to $145 million on a 14% growth in revenue to $1.44 billion.

Net income in the quarter rose 9.46% to $81 million year-on-year.