Thursday, March 20, 2014

Buyer sees supply chain risk

SAN DIEGO -- Boeing and Airbus risk over-stressing the aerospace supply chain as they ramp up plane production to unprecedented levels to meet strong demand. That's according to Steven Udvar-Hazy, one of the world's most influential plane buyers. Udvar-Hazy, chief executive of Air Lease Corp, a major customer in the $110 billion global passenger aircraft business, said Tuesday that the pressure of production acceleration could cause problems at the lower end of the supply chain. "I'm less concerned about Boeing and Airbus assembling the airplanes," he told Reuters during the annual ISTAT air leasing conference in San Diego. "As you go down the supply chain, hundreds of suppliers, small suppliers, can they keep up with 100 single-aisle aircraft a month? That's a big concern of ours, because a little guy can slip up and then it holds up everything." Airbus recently said it will lift production of its single-aisle A320 planes by nearly 10 percent, matching a similar move by Boeing. Both companies also are building many of their double-aisle planes at faster rates. By 2017, Boeing and Airbus will be churning out 138 new jetliners a month. (Source: Reuters, 03/18/14) Gulf Coast note: To help meet demand, the new Airbus A320 final assembly line will open in Mobile, Ala., next year.