Both Airbus and Boeing declared that they each exceeded operational targets for 2015,  however, the supply chain ecosystems for each of these aerospace manufacturers again have continual challenges to perform even better and with more agility in the months to come.

Airbus was designated by business media as the winner in order performance while Boeing claimed leadership in delivery performance.

Airbus announced the delivery of 635 completed aircraft for 85 customers in 2015, declaring new record delivery performance. Deliveries consisted of 491 A320 family aircraft, 103 A330 aircraft, 27 of the jumbo A330 aircraft and 14 of the A350 extra wide-body (AWB) aircraft. The latter A350 delivery performance is from our lens, troublesome.  First customer delivery was early in 2015, and with only 14 delivered since, four being in December alone, one can speculate that there may be supply chain challenges related to this aircraft. The 2015 delivery performance compares to 629 aircraft deliveries in 2014, thus a roughly one percent performance improvement.

Other notable operational highlights for Airbus were the September opening of the Airbus factory in Mobile Alabama where upwards of 50 A320 aircraft will be annually produced by 2018, as well as an indication that component parts are now in volume production for the first A330neo aircraft.

Airbus claimed sales performance leadership with the booking of 1036 aircraft orders in 2015. The manufacturer recorded a year-end order backlog of 6787 aircraft representing a combined value of $996 billion according to Airbus. Much of the order volume was driven by the A320neo family of aircraft. The current backlog represents the equivalent of ten years of production at current manufacturing volumes.

Boeing indicated that it delivered its own new record of 762 completed aircraft in 2015, compared to 723 aircraft delivered in 2014. The breakdown of deliveries include 495 737 aircraft, 135 787 Dreamliner aircraft, 98 777, 16 767, and 18 747 aircraft. Delivery performance uptick of the 787 Dreamliner is a positive indication of Boeing’s two factory production and assembly strategy. Other operational accomplishments were noted as the opening of an expanded Seattle Delivery Center to pave the way for increased deliveries of 737 aircraft and the first production model of the 737 MAX model aircraft.

Boeing booked 768 net orders valued at $112.4 billion at current list prices thus winning on value but short on volume order leadership. The again, use of list prices could be questionable. Year-end backlog was 5795 aircraft orders which would represent the equivalent of 7.6 years at 2015 production rates.

As Supply Chain Matters has annually observed in our overall performance commentaries related to both global aircraft manufacturers. supply chain and product management teams and ecosystems of both firms undoubtedly went the extra mile in successfully achieving each of the 2015 operational milestones.

We again extend our Supply Chain Matters Tip of the Hat recognition for their efforts.  Supply Chain Matters Tip of the Hat Award

Moving into 2016, global economic conditions are changing rapidly. Today, the price of U.S. crude oil dropped below $30 per barrel, the lowest mark since 2003. Economic growth within emerging economies has stalled and there is a lot of uncertainty concerning global economic growth.  The demand for modern, more fuel efficient aircraft deliveries obviously exists under changed conditions and a lot can happen in the coming months. Cheaper oil and rising interest rates adds more credence to the cyclical nature of capital equipment, and in the interpretation of multi-year backlogs.

Once again, congratulations to all Airbus and Boeing teams and their supply chain ecosystem and supplier teams for 2015 operational performance.

Bob Ferrari