Supply Chain Matters highlights Airbus and Boeing Q3-2023 commercial aircraft delivery and orders performance along with abilities to meet 2023 production milestones.
As Supply Chain Matters has highlighted for readers in a number of prior commercial aircraft industry supply network postings, both Airbus and Boeing have been under the looking glass to meet or exceed plans for ramping-up monthly new aircraft deliveries amid airline order backlogs that extend for years. In the specific case of the Airbus A320 neo narrow aisle family, backlogs now extend to the year 2030.
Both aircraft manufacturers continue to address challenges related to availability of certain key components or assemblies that have exhibited either quality and reliability issues related to component production and/or performance levels.
With a constant industry focus as to meeting monthly, quality and annual delivery performance milestones, which are directly tied to margin, cash-flow and profitability goals, the looking glass grows with each passing quarter.
Airbus Q3-2023 Operational and Order Intake Performance
Commercial Aircraft Deliveries
European based commercial aircraft producer Airbus reported total commercial aircraft deliveries of 172 aircraft for the third quarter of 2023. Nearly 89 percent of the total Q3 aircraft deliveries came from the aircraft maker’s highly popular Airbus A320 and A220 single aisle aircraft models.
With a stated 2023 total aircraft delivery target of 720 aircraft, the Q3 performance again falling short of the 180 threshold number provides added pressure for Airbus to make up the difference in the final quarter. With the latest Q3 delivery performance, Airbus has delivered a total of 488 aircraft to date in 2023, with the implication being that Q4 monthly production needs to meet or exceed 232 aircraft.
In early August we alerted Supply Chain Matters readers to continual reports of engine component reliability issues concerning engine supplier Pratt & Whitney’s geared turbo fan (GTF) engines.
This development involved a significant number of in-service Pratt GTF engines that now have to be inspected after the discovery of evidence of contamination in some of the metal used in the production of certain engine parts. Reportedly, metal contamination can lead to cracks. Pratt indicated that upwards of 1,200 in-service engines will have to be inspected after the discovery of evidence of contamination, and such inspections required off-aircraft disassembly, inspection including x-ray, and possible replacement of certain components. The inspection of these engines have significant implications for airline customers in the operation of their daily flight operations which has driven a need for the availability of spare engines while the inspections continue.
Upwards of 40 percent of the Airbus A320 neo family of aircraft are powered by the GTF engine produced by both RTX and Germany based MTU Aero Engines. The remainder of the Airbus single aisle operating fleet is powered by CFM International LEAP engines.
In conjunction with reporting of 2023 first-half financial and operating performance, Airbus CEO Guillaume Faury reiterated the aircraft maker’s existing plans to produce 720 commercial aircraft this year. However, he noted at the time that the company was assessing the impact the Pratt engine recall would have on aircraft deliveries over the next two years.
In September, Airbus indicated to customers that its monthly A320 family aircraft production and delivery plan for 2023 would not be impacted by this Pratt engine issue. Our sense in September that this Pratt engine challenge would have to be revisited given the need for a stock of needed spare engines for airlines that demand them.
Aircraft Order Intake
Airbus reportedly booked 200 new aircraft orders in Q3-2023,with 23 of those orders booked in September. Highlighted orders in Q3 included a United Airlines order for 60 additional A321neo aircraft, increasing total investment to 180 new A321 aircraft. Other orders included Hong Kong based Cathay Pacific’s order of 32 A320 neo family aircraft, and budget airline Wizz Air’s order for 75 A321neo aircraft.
Total orders booked this year as of the end of Q3 amounted to 1,280 orders, the majority of which are in the commercial single-aisle family, including very significant order quantities from IndiGo and Air India airlines.
Boeing Q3 Operational and Order Intake Performance
Commercial Aircraft Deliveries
Boeing reported a total of 105 aircraft deliveries in Q3, with 70 stemming from the Boeing 737 MAX family of aircraft. Deliveries of 737 MAX aircraft reportedly fell to their lowest overall levels in two years. According to reporting from the Wall Street Journal last week, a mere 22 new 737 MAX aircraft were delivered in September.
In August, word came to light regarding a manufacturing quality issue involving mis-drilled holes on the rear fuselage of the 737 from supplier Spirit AeroSystems. Boeing reportedly indicated that the defect was limited to a portion of its bestselling 737 MAX 8 narrow aisle model, but was evaluating if older-model 737 Next Generation aircraft may have also been impacted. Consequently, all existing and new aircraft have had to undergo inspection of the rear aft cabin structure, and in some cases, drill hole changes have to be implemented.
While the discovery is noted as not providing an aircraft safety risk, existing monthly production levels might be at risk until engineers determine which specific aircraft are impacted by this fault discovery, and address a resolution of the problem.
Boeing management has indicated that while aircraft deliveries would slow, the aircraft producer expects to meet the low end of the company’s 2023 aircraft delivery objectives which was a stated range of 400 to 450 aircraft.
As a result of this incident, the CEO of fuselage supplier Spirit AeroSystems has been replaced. With the addition of actual Q3 aircraft delivery performance, total aircraft deliveries for the year are 371 aircraft, compared to the upper goal of 450 aircraft.
Aircraft Order Intake
Boeing’s Q3 order intake was reported to be 321 orders, 224 of which came in September. The general breakdown of these orders were 200 involving the 737 MAX family, 120 orders for the twin-aisle 787 Dreamliner family and one 777F aircraft order.
Total orders booked through Q3 amount to 848 orders.
Boeing will report the company’s third quarter financial performance on October 25, and in addition to revenue and profit performance, the company is expected to provide further clarity on 737 MAX delivery performance and on total unfilled order backlog levels.
In summary, both of these dominant commercial aircraft manufacturers continue to be challenged with supply network challenges, quality and design issues along with other business related challenges. This comes as global based air carriers continue to support needs for increased post-pandemic domestic and global travel levels and the need for new or existing aircraft to support such schedules.
Of the two, Airbus continues to appear to lead in seizing added market share in the single aisle commercial aircraft sales segment, and in overall production execution, given ongoing supply chain constraints.
Performance in Q4 for both of these manufacture’s will be crucial to not only the making of prior commitments but of overall financial performance and airline customer satisfaction levels.
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