In their kickoff to 2014, aerospace OEM’s Airbus and Boeing both declared that their commercial aviation businesses exceeded 2013 operational targets.
According to an Airbus announcement, the OEM delivered 626 aircraft including 493 of the A320 family, 108 of the A330, and 25 of the mega A380 aircraft. That exceeded the 588 aircraft delivered in 2012.
Airbus further booked a record 1619 in new aircraft orders placing its overall backlog of unfilled aircraft orders at 5559 valued at over $809 billion at list prices.
Airbus has further declared itself as a more agile company. Evidence included the successful completion of the maiden flight of the new A350 XWB and final certification expected during Q3, and first customer deliveries in Q4 of this year. The maiden flight of the anticipated A320 NEO (new engine option) is also expected this year. The CEO of Airbus also pointed to more empowerment of local and manufacturing site teams yielding broader efficiencies and quicker decision-making as helping this OEM to maintain its current production rates which are being declared as the highest in the commercial aircraft industry.
Boeing declared its own internal performance record by announcing the most commercial airplanes delivered in a single year, that being 648 among three commercial aircraft production sites. Deliveries included 440 of next generation 737 aircraft, 98 of 777 and 65 787 Dreamliner aircraft.
Boeing booked a record 1531 gross commercial orders, the second largest year in company history and current order backlog for Boeing Commercial stands at 5080, somewhat lower than Airbus. In terms of moving forward in 2014, the company continues with challenges in ramping-up delivery volumes for its laggard 787 program while sustaining current delivery volumes in 737 production. Ongoing new development programs include the 737 MAX, a rival to the Airbus A320 NEO, a newer 787-10 version of the Dreamliner that will include more in-house sourcing and Boeing’s newly announced 777x family.
While both of the largest aerospace OEM”s can continue to tout which is the leader, brute realities remain as was noted in Prediction Five, specific industry supply chain challenges, outlined in our 2014 Predictions for Global Supply Chains. At the current rate of aircraft production and delivery levels, Airbus has at least nine years of backlog to fulfill without accepting a single new aircraft order. At its current rate of output, Boeing has 7.8 years of backlog. That implies that the overall aerospace industry challenge for dramatically increasing supply chain throughput remains very significant. Customers have placed their orders in order to take advantage of the newer, more fuel-efficient aircraft in their competitive business models and they surely have high expectations that promised delivery dates are met.
Agility and responsiveness are indeed going to be very important differentiators along with on-time and consistent performance for new product development milestones. Both OEM’s are challenged with increasing overall aircraft delivery volumes by an unprecedented 40 percent by 2015. Supplier collaboration and support is essential since program milestones depend heavily on supplier product and process innovation. Overall quality and reliability levels at first customer ship is another challenge as witnessed by the continued ongoing glitches involving the newly operational 787 Dreamliner.
Each of the major aerospace OEM’s can certainly boast of record performance in 2013, but the real challenges remain as each supply chain network responds to unprecedented requirements for development and execution.