FARNBOROUGH, England — This year’s biggest air show saw a notable absence of the huge plane orders typical of previous events. Instead, the spotlight was on Boeing and Airbus as they navigated the complexities of ramping up production after pandemic-related disruptions.
Analysts believe that problems such as training new workers will persist for years, causing ongoing difficulties for airlines, suppliers and manufacturers and leading to a shortage of new, more fuel-efficient aircraft.
“It’s a legitimate concern on the part of the supply base and the airlines that we haven’t met our commitments in terms of on-time delivery and predictability,” Ihssane Mounir, Boeing’s senior vice president of global supply chain and manufacturing, said during a panel at the Farnborough Airshow outside London last week. “So, of course, people are starting to plan and rethink their strategies.”
Airbus and Boeing are set to reveal their production plans for the coming months, with Airbus reporting its quarterly results on Tuesday, followed by Boeing on Wednesday. Wall Street analysts are forecasting another loss for Boeing in the second quarter, with Airbus also set to adjust its delivery targets for the year.
Modest orders amid production difficulties
The air show ended Friday with Boeing securing 96 orders and commitments, including previously confirmed sales, while Airbus collected 266 orders. That's significantly lower than the 826 orders at last year's Paris Air Show, according to consultancy Ishka. The Paris and Farnborough air shows alternate hosts annually.
Among the most notable orders was Korean Air’s commitment to up to 50 Boeing wide-body jets, including the 777X, which is awaiting regulatory certification. The airline also has orders for Airbus A350-1000 jets. With both manufacturers facing production challenges, Korean Air CEO Walter Cho noted, “Whoever delivers first will be our flagship, whoever is on time.”
The subdued order count reflects the fact that both manufacturers have largely sold out of narrow-body jets, such as the Boeing 737 Max and Airbus A321neo, for much of the decade. Boeing has a backlog of about 5,500 planes, while Airbus has more than 8,000 on order. The post-pandemic surge in travel has prompted airlines, including the recently merged Air India, to stock up on new jets.
Boeing’s low-key presence at the air show, without any of its commercial jets on display, underscored its focus on addressing safety and production issues. The company aims to increase production of its 737 Max planes to about 38 a month, with investors eagerly awaiting updates on that goal.
Meanwhile, Airbus unveiled its new ultra-long-range narrow-body aircraft, the Airbus A321XLR, which was certified by European regulators just days before the show.
Parts shortages and production delays
This year’s air show, usually a platform for previewing fleets set to fly for decades, was dominated by concerns about production in the months ahead. Shortages of parts, from landing gear to engine components to complex cabin interiors, have slowed production, depriving airlines of more fuel-efficient planes and frustrating executives.
Airbus is taking a more hands-on approach, employing more than 200 supply chain engineers among its suppliers, said Christian Scherer, CEO of Airbus’ commercial aircraft division. “We don’t want to go through a situation again where the supply chain doesn’t trust our projections,” Scherer told reporters before the show.
Last month, Airbus announced it would lower its aircraft delivery target for the year and slow its production ramp-up due to persistent supply chain issues, mainly in engines, aerostructures and cabin equipment.
In addition to supply chain issues, Boeing is dealing with a safety crisis stemming from a broken door cap in January and a series of manufacturing defects that have hampered production.
Workforce Challenges and Wage Issues
The loss of skilled workers who were laid off or took early retirement during the pandemic has impacted production of new jets. Manufacturers now face the challenge of training new workers.
“I think this is a three- to five-year problem,” said Kevin Michaels of AeroDynamic Advisory, an industry consultancy. “Wages need to be restored to make the industry more attractive to workers.”
Boeing’s Mounir acknowledged that lower wages are a problem throughout the supply chain and stressed Boeing’s need to invest in training its workforce. “There’s no question about it,” he said. “I don’t expect smaller suppliers, who are essential to the ecosystem, to carry this burden. We need to step up, using our own resources. It will be worth it.”
Training new workers from different sectors, such as “bakers, butchers and others,” takes time, noted Delphine Bazaud, head of industrial supply chain and digital operations at Airbus.
Michaels predicts that more of the U.S. aerospace work will move overseas to areas where labor is available.