Supply Chain Matters highlights Airbus and Boeing Q1-2024 commercial aircraft delivery performance.

As anticipated, Airbus way outpaced Boeing in quarterly aircraft deliveries, while both aircraft producers continue to deal with their own specific business or supply chain challenges.

 

Airbus Q1-2024 Commercial Aircraft Delivery Performance

European based commercial aircraft producer Airbus reported total Q1-2024 commercial aircraft deliveries of 142 aircraft.

The delivery composition included the following Airbus aircraft models:

A220 single aisle                12

A320neo single aisle          54

A321neo single aisle          62

A330   wide body               7

A350   wide body               7

Notably, 43 percent of the quarterly total were delivered in the final month of the quarter. This is yet another indicator of ongoing supply network challenges, reportedly the timely availability of aircraft engines and seats.

The Q1 delivery performance compares to 127 aircraft reported for the year-earlier quarter, representing a nearly 12 percent increase.

Managing Required Production Ramp-Up

In a prior November 2023 Supply Chain Matters published commentary, we highlighted statements from Airbus executives that reiterated a commitment to produce and deliver a total of 720 aircraft in 2023, even with a major operating performance issue impacting specific Pratt & Whittney engines among the current fleet of A320/A321 aircraft.   Executives further indicated that future monthly production plans for the same market popular single aisle aircraft family were progressing well towards the previously announced goal of 75 aircraft per month by 2026.

This week, a published Reuters report indicates the European plane maker continues to purposely add up-front costs to support expected single aisle A320/A321 monthly aircraft delivery increases planned to occur by 2026.

This includes both supporting supply network ramp-up as well as needed headcount increases to achieve a monthly cadence of 75 monthly aircraft deliveries  by this time period. The report indicates that some suppliers “have expressed doubts over Airbus ramp-up plans.” The concern is noted as having expensive unutilized capacity in future time periods. Airbus senior executives including the company’s CFO have indicated that the current massive backlog of unfilled orders is the best insurance to avoid excess capacity and working capital.

 

Boeing Q1-2024 Aircraft Delivery Performance

Rival Boeing, as expected, reported a rather muted quarterly aircraft delivery performance for the past quarter.

The U.S. based plane maker reported the delivery of a total of 83 commercial aircraft during the quarter, the vast majority being the troubled Boeing 737 MAX single aisle family.

The delivery composition consisted of 67 single aisle 737 aircraft, 3 of the wide body 767 aircraft and 13 of the 787 Dreamliner wide body aircraft.

This Q1 performance compared to 157 aircraft delivered in Q4-2023 and 113 aircraft delivered in the year-earlier period.

After the incident of a rear cabin door blowout of an Alaska Airlines 737 MAX 8 aircraft that occurred in January, the U.S. Federal Aviation Administration (FAA) has imposed a monthly cap of no more than 38 of 737 MAX monthly production because of deficiencies found in the aircraft assembly processes both within Boeing and fuselage supplier Spirit AeroSystems.

Boeing senior executives acknowledge that the plane maker is purposely slowing down monthly production to address cited aircraft quality issues and the requirement of traveled work and shadow factory operations that were needed to address aircraft quality deficiency needs that have become ever more visible.

Boeing CFO Brian West recently indicated at an industry event that in: “The first half, the rates (of production) will be lower; the second half, they are going to be higher as we get towards that 38 per month. Going beyond 38 per month will be up to the FAA.”

As our readers are aware at this point, Boeing has announced a series of senior executive changes including the Board chair and the eventual replacement of the company’s CEO.

As we have stated on this platform:  The fixing of Boeing’s design and production challenges will take added time and patience, in addition to new leadership with added resolve and purpose.

A final observation relative to monthly and quarterly delivery performance relates to the underlying and differing challenges being addressed by both dominant industry players.

 

Added Perspectives

For Airbus, the challenge is one of scaling up to meet existing market demand and of overcoming needs for added skilled talent, addressing supply network availability and scale-up of capacity needs. Airline customers dealing with increased summer travel demand and a robust outlook for future travel growth, are looking to Airbus to find ways to increase monthly production sooner than 2026. Airline executives further look to Airbus to address nagging component supply issues including those related to the reliability and increased availability of Pratt & Whitney GTF and CFM International engines.

For Boeing, the challenge is more far reaching in corporate leadership, fundamental engineering, production and quality adherence capabilities. Airline executives have become far more candid and public in their observations that Boeing needs to solve its production quality and process control challenges sooner rather than later. The operational and financial impacts to airlines seeking new Boeing aircraft have become ever more troublesome.

As we have further stated: Boeing needs to rebuild itself to again be a vibrant industry competitor, aircraft designer and contributor to innovation. A lot of the industry’s suppliers, airlines and travelers have a vested interest in the company’s success.

 

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