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Boeing and Airbus Can't Make Enough Airplanes To Keep Up With Demand (axios.com)

Posted by msmash on from the demand-and-supply-problems dept.

From a report on Axios: Aerospace manufacturers like Boeing and Airbus cannot produce airplanes fast enough to meet demand despite what the Wall Street Journal calls "one of the industry's steepest production increases since World War II." The run up in demand is partially the result of fast-growing airline industries in the Middle East and China. Manufacturers will need to increase production by 30% to meet current orders, and such booming demand is one sign of a healthier global economy.

5 of 170 comments (clear)

  1. Re:Supply and demand? by HornWumpus · · Score: 5, Informative

    Long leed times and a historic boom/bust cycle. Large airplanes are contracted years ahead of time. Keeping the line running is paramount. Start/stop is a company and/or model killer.

    --
    John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  2. Re:Supply and demand? by HornWumpus · · Score: 3, Informative

    Boeing still does much better than new entrants have. See the Japanese and Chinese efforts to make their own wide bodies.

    I'm surprised Tupolev isn't trying to get a bigger slice. But first they have to get competitive on fuel costs.

    Nobody is turning on a dime and jumping into the market.

    --
    John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  3. Re:Supply and demand? by Richard_at_work · · Score: 3, Informative

    Actually the article is a load of crap - Boeing is reducing 777 production right now, is in talks to end 747 production and has scrapped a production increase in the 787 (and may indeed scrap an entire production line in the next few years).

    The only aircraft seeing production rate increases at the moment (that arent related to a new program coming on line, such as the A350XWB) are the A320 series and the 737 series - those sell well more than a thousand copies each year, with production lagging sales considerably.

  4. India, China, Fracking ... by 140Mandak262Jamuna · · Score: 4, Informative
    Last time oil hit almost 150$ a barrel, and stayed well above 100$ for a longtime after that, all the airlines were squeezed dry. Southwest alone prospered it had locked in oil at 60$ a barrel for several years and it was riding high. It was making so much profit on oil desk, it was rumored SEC is going to classify it as a energy trader and not a transporter. Some airlines were prohibited by the regulators to buy options and were forced buy in the spot market. Airlines have learnt their lesson well. When the oil crashed below 40$ most of them have locked in oil at low prices. So they are sort of protected from oil shocks.

    And China and India are booming. The largest airplane order was from Indica, a domestic airline from India. 410 orders for Airbus 320. Airbus with their government funding is able to give them very long lease terms and guaranteed buy back price. Boeing needs to raise cash on commercial paper, Airbus does so on government underwritten bonds. But that is a different story.

    Confluence of these factors, and a general belief that oil is never going to exceed 100$ ever again is fueling the optimism and large airplane orders. Oil producers trying to kick their oil dependence are trying to become transportation centers. Now a days it is impossible to beat the fares offered by Emirates, Qatar, Kuwait, Etihad to India/China from USA. So even the oil states are investing in airplanes.

    They believe the moment oil goes above 60, fracking becomes profitable again. At 80, the fracking will flood the market with over supply and oil will slideback.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  5. Tell that to the fired employees by sdinfoserv · · Score: 3, Informative

    That's complete Bullsh*t.
    I live in Seattle. Boeing announced it will be cutting jobs in 2017 due to " fierce competition with rival Airbus and a drop in new orders".
    They will be cutting the number of planes produced per month.
    http://www.bizjournals.com/sea...