Tag: Commercial Aviation

Boeing Increases 787 Dreamliner Production

Reuters (5/30) reports that The Boeing Company has increased production of its 787 Dreamliner up to four planes per month from three as it prepares to ramp up to five per month by the end of 2023, as well as add a second production line at the company’s South Carolina facilities to help complete work this year on inventory 787s that are being modified to meet the standards of the Federal Aviation Administration.
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Indigo Partners Warns that Supply Chain Challenges Could Last Until 2028

Aviation Week reports that Indigo Partners is warning “that aircraft supply chain issues could be prolonged as far out as 2028, which could cause challenges for airlines worldwide.” The company’s managing partner, William Franke, spoke at the CAPA Americas Aviation Summit in Ontario, California, on Wednesday and warned of the extended possibility of supply changes affecting the global aerospace industry.
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Used Parts Increasingly Sought to Keep North American Jets in ihe Air

Reuters reports that, amid rising costs and supply-chain shortages, North American airlines and aircraft repair shops increasingly using used and generic parts in keeping jets airworthy. Some brand-name parts makers, such as General Electric Co, “stand to benefit because they also sell used parts, known as used serviceable material,” as do some planemakers, such as Bombardier, which “uses a teardown venture to gain parts for its growing ‘aftermarket’ business.” Honeywell Aerospace Trading expects demand for its used parts “to continue through at least the first half of 2024, said Heath Patrick, president for the Americas aftermarket segment at Honeywell Aerospace.”

 

Airlines Set to Announce Strong Earnings, but Economic Uncertainty Raises Fresh Concerns

Reuters reports major US airlines “are expected to reiterate the strength of travel demand when earnings season gets underway later this week.” At the same time however, “with rising interest rates, high inflation, mounting job losses and turmoil in the banking industry increasing the odds of an economic recession, the spotlight will be on the elasticity of consumer demand.” While pent-up travel demand as well as “constrained airline capacity due to shortages of aircraft, spare parts, and labor have, thus far, allowed the industry to avoid the fallout from a slowdown in the broader economy,” it is still not clear “how long this travel boom will last.”
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Labor Cost Increases See Airline Margins Fall

Aviation International News reported that labor costs have steadily increased for US airlines since air travel has started to come back, tracing the increase back to mid-2021. Moody’s Investors Service said that it “sees aggregate labor expense for the eight U.S. airlines it rates increasing by 19 percent in 2023 and another 8 percent in 2024, as the low U.S. unemployment rate continues to create staffing and labor cost headwinds – as will the mandatory retirement age of 65 for pilots if Congress does not pass legislation to raise the limit to age 67.” Moody’s says that while combined revenue for the eight largest US airlines should reach $212 billion this year (a 13% increase from 2022), “capacity shortfalls brought on by shortages of aircraft, spare parts, maintenance capacity, and labor will help support ticket prices well into 2024, even if a recession takes hold and slows demand, said the report’s author, Moody’s Investors Service senior v-p Jonathan Root.”
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TD Cowen Says Aviation Aftermarket Ready for Boost

Aviation Week reports that a new TD Cowen analysis projects rising air travel demand to “significantly outpace new capacity created by aircraft deliveries for the next several years, setting many commercial aftermarket providers up for an extended run of strong growth.” Several factors “are working together to drive already strong aftermarket demand even higher,” with the chief among them being steadily rising global traffic. Markets such as the US are exceeding 2019 available seat mile figures, but other markets including Europe and Asia are still working toward a full recovery.
Full Story (Aviation Week)

Aerospace Parts Suppliers Not Yet Able to Support Airbus, Boeing Needs

Reuters reports that The Boeing Company and Airbus both have planned increases in jet output in 2023, but a recent Morgan Stanley survey of the aerospace supply chain industry says that will not be easy. The supply chain sector “seeks to speed up its recovery from a pandemic-led slowdown as a travel boom spurs demand for jets, inflationary pressures and labor availability are impeding their progress and have dampened sentiment, the survey showed.” Labor and parts shortages have blunted Boeing and Airbus from realizing their goals for increased jet production rates, with worker shortages cited as being the “biggest constraint” for suppliers.
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Electra.aero Secures $85M in Funding to Build ESTOL Prototype

Aerospace America reports that Electra.aero has secured new funding, “including $30 million from the U.S. Air Force AFWERX program, to develop a full-scale prototype” of an electric short takeoff and landing aircraft (eSTOL). The terms of the $30 million award include meeting “undisclosed milestones toward building and operating its pre-production prototype” as well as matching the “government funds with private funds.” Electra.aero says “it has exceeded that match by raising an additional $55 million from private investment, for a total of $85 million.”
Full Story (Aerospace America)