Marketing Musings: Tired of being captive to automotive? Try aerospace!


The aerospace industry is booming!  That's the latest word coming out of the big Farnborough Airshow held recently in Farnborough, England where Boeing and Airbus, the two largest head-to-head competitors captured some record-breaking orders for new commercial aircraft.

Forecast International Inc., a market intelligence and analysis firm, reported that both "Airbus and Boeing are gearing up to roll out large commercial jetliners in ever-increasing quantities over the next 10 years."Farnborough Air Show

The big question, noted the report, is whether or not component suppliers will be able to keep up with demand. Forecast International's newly released "The Market for Large Commercial Jet Transports" projects that 14,655 large commercial airliners will be produced in the 10-year period from 2012 to 2021, with an estimated production value of $2.04 trillion in constant 2012 U.S. dollars.

Both companies are anticipating production increases, and are considering additional increases for the future. Airbus recently announced that it will invest some $600 million to build an assembly plant in Mobile, AL, and hire up to 1000 people so that it can be closer to the U.S. market for aircraft. 

"The desire of Airbus and Boeing to expand production is putting considerable strain on their suppliers, especially in light of ongoing production increases," the Forecast International report states. "Adding to the pressure on suppliers is the fact that Airbus and Boeing are shifting their focus from manufacturing to integration, and are looking to outsource more design and production responsibilities."

Forecast International's Senior Aerospace Analyst Raymond Jaworowski said, "The potential for bottlenecks among suppliers means that Airbus and Boeing need to tread cautiously when it comes to future production increases.

Boeing Co. landed its first big order at this year's Farnborough Airshow, signing off on $7.2 billion worth of business from Air Lease Corp. for 75 of its redesigned 737 aircraft. So far, Boeing has firm orders for just over 1000 of the aircraft, the MAX, which incorporates new technologies designed to make the aircraft more efficient, reliable and comfortable, said Boeing release.

Another release noted that United Continental Holdings Inc. and its wholly owned subsidiary, United Air Lines Inc., placed an order for 150 737 airplanes including 100 of the new 737 MAX 9 aircraft. That deal is worth $14.7 billion at list prices and also includes 50 Next Generation 737-900ER (Extended Range) aircraft.

Forecast International's report notes that both Airbus and Boeing have considerable incentive to keep production rates high and growing, as the two companies "hold large numbers of unfilled orders." However, it means long lead times for customers to take delivery of their aircraft which often means frustration on the part of these customers. It could also result in their customers looking at other suppliers, such as aircraft from Bombardier such as the C-Series, as well as the COMAC C919, and the Irkut MC-21.

Speaking of Bombardier, that Canadian firm did pretty well at Farnborough, announcing that since July 7, the company has received firm orders and other commitments for up to 52 aircraft with China Express Airlines, airBaltic, Jazz Aviation LP and an undisclosed customer. These orders total $3.27 billion for the company's Q400 NextGen, CRJ and CSeries aircraft. The unidentified customer ordered five CS-100 and 10 CS-300 jetliners. 

A statement from the company said it has firm orders this year for 138 C-series airliners and customers include Deutsche Lufthansa AG, with orders for 30 CS-100 aircraft and feeder airline operator Republic Airways, which ordered 40 CS-300 versions. Bombardier has aircraft assembly operations in its industrial park in Queretaro, Mexico.

Last October, the company announced that it would build the aft fuselage for its new Bombardier Global 7000 and Global 8000 business jets at the Queretaro facility, a move that would expand the company's operations there. The company also assembles major composite structures for the Learjet 85. The company currently employs 1700 and will ramp up to about 2500 by the end of 2012.

In a press conference on July 11, Ralph Acs, vp and GM, Learjet, Bombardier Business Aircraft, confirmed that there are now four Learjet 85 test aircraft in various stages of fabrication. The Learjet 70 and Learjet 75 aircraft programs are also progressing well, according to Acs, with the first two flight test aircraft having already logged more than 135 flights and 600 test hours.

Given the high level of activity in the aerospace industry currently, and the concern over suppliers' ability to meet target production levels, it might be worth the while of those in the plastics industry - molders, moldmakers and materials suppliers - to get the marketing ball rolling, start promoting products and services, and get on the bid list. It appears that these three manufacturers are going to be plenty busy and maybe even looking to add to their stable of suppliers.

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