Remember when Boeing had parts
issues then battery issues and so forth. Well Karma comes around as a self-predicting
outcome even for Airbus as it houses 24 NEO's and a half dozen A350's within
its vast holdings in Europe. The tight dogfight between Boeing and Airbus
suggest Boeing will once again out deliver Airbus during 2016. The parts
bin and technological development has stumbled Airbus into a P&W standoff
for single aisle A320's as newly run A320's sit idle awaiting its PW engine
upgrades.
The ticking
clock will build its parking lot into a massive headache. Boeing lined up its
unfinished 787's outside on Paine Field until moving some into Change
Incorporation and Re-work warehousing. They have just cleared the last of
those obstinate first builds from the rain swept tarmac since 2011. Five years
later Airbus becomes a lady in waiting and waiting for seats, parts and
engines.
It will
skew the Airbus cash flow and dash another year for its hopes of becoming the
world's largest airplane maker. Two different continents two different results
tests the respective airplane makers on how they handle the hick-ups. Boeing
has cleared its forest of problems from the last decade. Airbus has just
entered into the "issue zone" during a time of critical order making
for both giants. Any delay with delivery can handicap Airbus during this year
and it has already during the first four months of 2016 made it
impossible to catch-up with Boeing as it has already hit its stride of twelve
787 a month production pace. Next time Boeing increases single aisle
production, it will be at a 47 airplane a month rate.
Boeing
has made it the key talking point of its strategy making more airplanes than
its competitor. It realized during 2010 the NG series needed a production change
since it was losing sales to Airbus from a pure backlog point of view. They
sought a level of backlog that would benefit the customer ordering pattern
within a customer's five year plan. Both the 737 and 787 backlog fell outside
this five year window causing the wait time to be a critical part for gaining
additional sales.
Airbus
has already begun a reaction with Boeing's production onslaught and has set its
production goals upward meeting the demand within a relative time frame for its
customers. The problem for Airbus that its own supply chain is having teething
woes, not the Aircraft. The critical moment is 2016. Airbus needs to sort out game
changers like seats and other critical parts in order to compete with a fully
operational Boeing production stream.
The
production forecast is as important as the ordering forecast as it will give
opportunity for its customers if delivery matches market demand. This is a long
held observation in the dynamics of production and sales relationship. Henry
Ford first mass production of its automobile made production the key selling
point for its Ford motor car. A customer didn't have to wait and it could own a
car meeting a superior standard in a short amount of time.
Boeing
referred back to the industrial age early in the 20th century. Build it just in
time, creating cash flows and advancing efficiency at a higher rate than its
competitor. Airbus is struggling at this time five years after Boeing struggled
and now the comparison will be if Airbus recovers faster than Boeing did during
the next five years.
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