Both Airbus and Boeing announced their commercial aircraft deliveries for the first-half of 2014, which are indicators of each OEM’s current supply chain support activity. These announcements come as a prelude to this month’s Farnborough International Airshow in Great Britain, a premiere event for announcing newly booked orders.
Airbus indicated that it delivered 303 aircraft through the end of June, an increase of 2.7 percent from the year earlier period. The aerospace OEM indicated that its plans call for total 2014 aircraft deliveries to match the 2013 number of 626 aircraft. On the inbound order front, Airbus booked 290 net commercial aircraft orders in the first-half although cancellations surged after global carrier Emirates cancelled its outstanding order for 70 A350 aircraft.
Boeing indicated that it delivered 342 aircraft in the first six months including 48 of the 787 Dreamliner’s. That 787 number is slightly below Boeing’s initial estimates for monthly 787 production volumes in 2014. The numbers include the delivery of 239 new 737 Next Generation aircraft which equate to an average production run-rate of 40 per month which is a considerable production pace. The current pace of commercial aircraft deliveries would position Boeing’s supply chain in a position to exceed the total 648 total commercial aircraft delivered in 2013.
While both Airbus and Boeing supply chain teams should be applauded for first-half performance, the fact remains that multi-year order backlogs remain rather large that the jet buying frenzy among Asian based carriers may give way to a more sober approach that reflects the current global airline challenges of intense competition, pilot shortages and inadequate infrastructure. As Supply Chain Matters and now traditional business media has opined in previous commentaries, multi-year backlogs can give way to more changing market dynamics. The recent Emirates announced cancellation of its hefty A350 order could be considered another indicator of changing industry dynamics.
We again echo our prior advisory, namely that an enviable industry position awash with order backlog does not condone a business-as-usual focus on product lifecycle and supply chain management. Rather, dynamic and responsive capacity management, end-to-end value chain intelligence, enhanced supplier collaboration and goal-sharing will all come into play as aerospace supply chains continue to adjust to extraordinary and constantly changing industry dynamics.