Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Production increase delays hurt Airbus costs December 2, 2024
- Books to consider for Christmas November 29, 2024
- Slow, methodical process to restore Boeing’s trust, efficiencies November 28, 2024
- Engineering, Innovation is our DNA: Embraer November 25, 2024
- No changes to US labor Scope Clauses for indefinite future, says Embraer November 22, 2024
Aircraft production woes stretch far beyond Boeing
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By Judson Rollins
June 17, 2024, ©. Leeham News: Estimating airplane delivery rates isn’t much more than a guessing game nowadays.
While many headlines point fingers at beleaguered Boeing and Spirit AeroSystems, aviation’s production woes are much more complex. Even in 2024, the labor shortage legacy of COVID-19 and raw material shortages exacerbated by the Russia-Ukraine war loom large over the industry.
Airbus struggles to deliver airplanes on time, and engine makers also see their deliveries constrained by supply chain issues.
Source: AFP via Aviation Week Network.
Summary
- Boeing commercial production is far below advertised rates.
- Airbus deliveries suffer from shortages of seats, other parts.
- Embraer says deliveries would be higher without supply chain issues.
- COMAC’s disruption opportunity is dampened by likely trade conflict.
- Pratt and GE Aerospace slowly ramp up delivery of redesigned components.
Focus on quality not slowing innovation, says GKN
By Tom Batchelor
April 18, 2024, © Leeham News: The crisis at Boeing forced the entire supply chain to re-evaluate manufacturing processes and double down on quality control – but that is not yet stifling innovation, according to Peter Dilnot, CEO of Melrose PLC, the parent company of aerostructures and engine components supplier GKN Aerospace.
GKN Aerospace has undergone a restructuring that is now largely complete. Source: GKN
Melrose is most of the way through a comprehensive restructuring, and the company has emerged as a pure-play aerospace business that has consolidated production sites and exited “non-favorable” contracts.
“We don’t want to be everywhere,” explained Dilnot during a briefing in London attended by LNA this week, which was intended to set the scene ahead of July’s Farnborough Airshow.
“One of the reasons I think aerospace is so much in vogue at the moment is that it is one of the very few markets where you’ve got structural growth. Aerospace is unique in that we’ve got these long order backlogs, structural growth and as a result a growing top line for industry participants.”
From 50 production facilities pre-COVID, GKN is now down to 33, and it will soon be at 31 sites. Its four global technology centers remain in the UK, where it is headquartered, the US, the Netherlands, and Sweden.
The positioning of Melrose as a leaner business after the spin-off of its automotive unit is producing positive results. The company posted revenue of £3.35bn ($4.29bn) for 2023, 17% growth over the previous year, and adjusted operating profit of £420m (up from £186m in 2022), in its full-year results last month. Operating margin reached 12.5%, up from 6.3%, and profits of £700m are being targeted by 2025.
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GKN Aerospace eyes further growth as earnings surge
By Tom Batchelor
Mar. 7, 2024, © Leeham News: Strengthening demand for airframe structures and engine components helped British supplier GKN Aerospace, a subsidiary of Melrose PLC, achieve higher profits and record margins in 2023.
GKN Aerospace has invested in its sustainable additive fabrication capability. Source: GKN
The company, whose supply contracts encompass all leading commercial narrowbody and widebody aircraft, as well as business jet and defence customers, announced full-year results on Thursday.
Melrose posted revenue of £3.35bn ($4.29bn), 17% growth over the previous year, and adjusted operating profit of £420m (up from £186m in 2022). Operating margin reached 12.5%, up from 6.3%.
The Birmingham, England-based group enjoyed growth within its engines division of 16%, and structures growth of 18%, largely from OEM deliveries ramping-up.
CEO Peter Dilnot told investors 2023 had been a “transformational” year with “profit more than doubling, ahead of expectations.”
He said order backlogs stretching nearly a decade across Airbus and Boeing lines, and a “significant gap” in time before next-generation platforms are likely to be introduced, had resulted in “something of a harvest period” for GKN.
SR Technics navigates surge in MRO demand, bridge to new-gen engines
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By Judson Rollins
November 13, 2023, © Leeham News: On the sidelines of last month’s Aviation Week MRO Europe conference, LNA sat down with Matthias Düllmann, CEO of engine MRO provider SR Technics.
Düllmann spoke at length about how the company is coping with ongoing supply chain issues while adding support for GTF and LEAP engines. He also discussed the recent AOG Technics undocumented parts scandal, staff retention, sustainability, and aviation’s public image.
Matthias Düllmann. Credit: SR Technics.
Summary
- Supply chain issues persist, even for legacy engine parts.
- Supplier approval processes offer protection from unscrupulous suppliers.
- Staff recruiting and retention are growing concerns.
- Sustainability is a key pillar to keep aviation attractive as an employer.
