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By Bryan Corliss

Sept. 11, 2023, © Leeham News: Negative cash flow in the quarters ahead. Ongoing issues with the supply chain. OEMs struggling to meet high airline demand as Tier 1s wrestle with quality issues. New technology wearing out faster than the old systems it replaced.

The No. 1 takeaway from last week’s Jefferies Financial Group Industrials Conference presentations is that the aerospace industry is still a few years away from being in a stable state capable of meeting the demands of customers and shareholders alike.

“We know our customers really do want to make more,” said Howmet CEO John Plant, whose company casts fasteners and engine components for Tier 1s and OEMs. “The question becomes when can we achieve these improved rates?”

Plant went on to say that he believes both Airbus and Boeing will hit their goals for increased widebody production; Airbus at 9/mo  on the A350, Boeing at 10/mo for the 787. 

The question, he said, is whether the OEMs will hit those rates in 2025 or 2026.

Executives from Boeing, Spirit AeroSystems and Howmet all presented at the conference, and all agreed that there’s reason to be optimistic, given the strong demand from airlines for more planes. 

The issue, as Plant put it, is the industry’s ability to meet that demand. “We haven’t seen the real benefits of increased aerospace production.”

• Companies discuss latest 737 quality issue
• Spirit tries to get on track as refinance deadline looms
• Gentile: Supply chain needs new contract terms
• Boeing CFO projects losses for next quarter
• Howmet talks about engine challenges
• Takeaway: Fundamental demand is strong, but…