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By Bjorn Fehrm

Introduction  

September 28, 2020, © Leeham News: The worldwide COVID-19 pandemic is shaking the air travel and airliner manufacturing industries like no crisis before.

More than 9/11, the oil crisis of 1973 or 2005 or the financial crisis of 2008. The problems for the airlines and the airframe OEMs are on the front pages of the world's media.

The part of the airliner industry that is not so visible but is perhaps hardest hit, is the engine industry. Its weird business model amplifies the effects of the crisis.

Summary

• Airframe OEMs lose money on the first hundreds of aircraft produced.
• When they announce “black numbers”, it means the per aircraft losses stop. It doesn’t mean the aircraft program is positive.
• For engine OEMs, it’s worse. They never reach ‘black numbers” on engine production. Their only money makers are old engine programs that fly a lot.