Subdued Orders at Major Air Show Highlight Ongoing Supply Chain Challenges for Boeing and Airbus

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FARNBOROUGH, England — This year’s largest air show saw a notable absence of the massive plane orders typical of previous events. Instead, the spotlight was on Boeing and Airbus as they navigate the complexities of ramping up production following pandemic-related disruptions.

Analysts suggest that issues such as training new workers will persist for years, causing ongoing difficulties for airlines, suppliers, and manufacturers, and leading to a shortage of new, more fuel-efficient aircraft.

“It’s a valid concern from the supply base and airlines that we haven’t met our commitments regarding on-time delivery and predictability,” said Ihssane Mounir, Boeing’s senior vice president of global supply chain and manufacturing, during a panel at the Farnborough Airshow outside London last week. “So, naturally, people are starting to plan and rethink their strategies.”

Airbus and Boeing are set to reveal their production plans for the coming months, with Airbus reporting its quarterly results on Tuesday, followed by Boeing on Wednesday. Wall Street analysts anticipate another loss for Boeing in the second quarter, with Airbus also adjusting its delivery targets for the year.

Modest Orders Amid Production Struggles

The air show concluded on Friday with Boeing securing 96 orders and commitments, including previously confirmed sales, while Airbus garnered 266 orders. This is significantly lower than the 826 orders recorded at the Paris Air Show last year, according to consultancy Ishka. The Paris and Farnborough air shows alternate annually as hosts.

Among the most significant orders was Korean Air’s commitment to up to 50 Boeing wide-body jets, including the 777X, which is awaiting regulatory certification. The airline also has orders for Airbus A350-1000 jets. With both manufacturers facing production challenges, Korean Air CEO Walter Cho remarked, “Whoever delivers first will be our flagship, whoever is on time.”

The subdued order count reflects the fact that both manufacturers have largely sold out of narrow-body jets, like the Boeing 737 Max and Airbus A321neo, for much of the decade. Boeing has a backlog of around 5,500 planes, while Airbus has over 8,000 on order. The increase in travel post-pandemic has prompted airlines, including the recently merged Air India, to stock up on new jets.

Boeing’s low-key presence at the air show, with none of its commercial jets on display, underscored its focus on addressing safety and production issues. The company aims to boost production of its 737 Max planes to about 38 per month, with investors eagerly awaiting updates on this goal.

Airbus, meanwhile, showcased its new ultra-long-range narrow-body aircraft, the Airbus A321XLR, certified by European regulators just days before the show.

Parts Shortages and Production Delays

This year’s air show, typically a platform to preview fleets set to fly for decades, was dominated by concerns over production for the upcoming months. Shortages of parts, from landing gear to engine components and complex cabin interiors, have slowed production, depriving airlines of more fuel-efficient planes and frustrating executives.

Airbus is adopting a more hands-on approach, employing over 200 supply chain engineers across its suppliers, said Christian Scherer, CEO of Airbus’s commercial aircraft division. “We don’t want to face a situation again where the supply chain doesn’t trust our projections,” Scherer told reporters before the show.

Last month, Airbus announced it would lower its aircraft delivery target for the year and slow its production ramp-up due to persistent supply chain issues, mainly in engines, aerostructures, and cabin equipment.

Boeing, in addition to supply chain woes, is dealing with a safety crisis stemming from a broken door cap in January and a series of manufacturing defects that have hindered production.

Workforce Challenges and Wage Issues

The loss of skilled workers who were laid off or opted for early retirement during the pandemic has impacted the production of new jets. Manufacturers now face the challenge of training new workers.

“I think this is a three- to five-year problem,” said Kevin Michaels of AeroDynamic Advisory, an industry consultancy. “Wages need to be restored to make the industry more attractive to workers.”

Boeing’s Mounir acknowledged that lower wages are an issue throughout the supply chain and emphasized the need for Boeing to invest in training its workforce. “There’s no doubt,” he said. “I don’t expect smaller suppliers, essential to the ecosystem, to bear that burden. We need to step up, using our resources. It will be worth it.”

Training new workers from different sectors, such as “bakers, butchers, and others,” takes time, noted Delphine Bazaud, head of industrial supply chain and digital operations at Airbus.

Michaels predicts that, in the U.S., more aerospace work will shift overseas to areas with available labor.

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