Airbus supplier ownership structure questioned

By Laura Mueller

June 26, 2018, © Airfinance Journal: Airbus-owned, tier-one supplier Premium Aerotec could end up with different owners due to the changing supply chain landscape, Dr David Pritchard, associate professor SUNY Empire State College, told delegates at the Leeham Co/Airfinance Journal Inaugural Southeast Aerospace & Defence Conference in Mobile today.

“I think it will likely be spun off to private equity investors…you need to look at changes in the airframe industry. It doesn’t make sense for Airbus to own it and to own everything,” he says.

Counter to Boeing plan

The move, however, would run counter to those at rival Boeing, which has put an emphasis on the vertical integration of its supply chain, he adds.

“Boeing is proving me wrong as they want to own everything,” he says, adding: “You really need to look at where capital investments are going in the future. Just how much will Airbus and Boeing put into their new manufacturing processes, that is the real question.”

Premium Aerortec generated revenues of €2 billion in 2017. The company’s core business lies in the development and production of metal and carbon fibre composite aircraft structures.

Pritchard calls for “more super tier one suppliers across the industry.”

Boeing has announced plans to triple its services revenue during the next five years.

Its services unit revenue grew by 5.5% to $14.6 billion in 2017 and the growth rate is forecast to be even higher this year.

Boeing Global Services chief Stan Deal has indicated that part of the $50 billion target would “clearly involve” acquisitions.

The manufacturer recently formed a joint venture with Adient, an auto parts business to develop and manufacture economy seats. Boeing says the move is in response to delays in seat production and capacity constraints from suppliers Rockwell Collins and Zodiac Aerospace.

2 Comments on “Airbus supplier ownership structure questioned

  1. Well of course Boeing confounds him.

    Each CEO thinks he has to change things to prove how brilliant he is.

    You do just the opposites of your predecessors, Business 040 for idiots.

    If he bought, you sell.

    If he sold, you buy.

    Pretend its all original and you are the best thing since self slicing bread. Boards love that stuff. PT Barnum all over again, sucker is born every minute and take advantage to it. Then of course blame the workers when things go into the crapper.

    Anyone look at GE lately? Tranes et all have left the station (pun intended)

  2. “I think it will likely be spun off to private equity investors…you need to look at changes in the airframe industry. It doesn’t make sense for Airbus to own it and to own everything,”

    About the company owned by Airbus:
    “Premium Aerortec generated revenues of €2 billion in 2017. The company’s core business lies in the development and production of metal and carbon fibre composite aircraft structures.”

    Am I missing something?
    Why wouldn’t it make sense for Airbus to own a company that is likely to increase it’s content level in future Airbus programs?

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