A Production Struggle at Airbus and Boeing

Both duopoly members are having difficulties raising production rates and meeting production targets.  This is particularly true for the high volume narrow-body aircraft that comprise the bulk of their backlog, the A320neo family and the 737 MAX.   As we enter the second quarter of 2025, issues have emerged for both companies.

Supply Chain Constraints Continue in Key Segments

The supply chain continues to be problematic

. The SPS Technologies fastener plant near Philadelphia that burned down won’t be restored quickly, and it supplies a substantial portion of the industry’s fasteners. While this will be manageable at today’s production levels, there isn’t much room for growth until the facility can be restored. 

The total forging capacity in aerospace is barely keeping pace with today’s demand. With a three-year lead time for a new facility to train employees, it likely won’t meet industry demand if OEMs meet their increased production targets next year.   Essentially, OEMs should prepare for additional shortages of components. While this news isn’t new, countervailing news of capacity increases across the industry isn’t happening in today’s environment.  While lead times for components are coming down, we’ve heard of delivery quotes of 72 months for some elements, a far cry from standard lead times.