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. [caption id="attachment_90651" align="aligncenter" width="640"] source: WGAL[/caption] 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. Economic Uncertainty Doesn’t Help Uncertainty isn’t helping. The current US administration's threats of tariffs are forcing companies to reevaluate their strategies. Should international suppliers invest in US-based facilities to meet the needs of Boeing and Airbus' US assembly lines, or do they believe these tariffs may not be permanent once voters feel the inflationary and recessionary impacts of the policies? As a company, one may be forced to evaluate US political futures in their planning processes, and bet on whether tariffs will be permanent or temporary. That’s not a very sound basis for planning new facilities. However, with capacity shortfalls, decisions must be made during uncertain economics. With several companies likely to defer a decision until additional clarity into trade economics can be determined, the supply chain ramp-up could slow just as the industry needs it to speed up. Unexpected Constraints Can Occur Today, Boeing news indicates that planned production ramp-ups to 38 per month in March and beyond for the Boeing 737 MAX have hit bottlenecks. Published reports suggest that Boeing has scaled back its rate to 31 per month due to issues in wing production that resulted in Jobs Behind Schedule (JBS) as installing systems into the wings turned into a bottleneck. Since JBS is one of the key factors in the FAA allowing Boeing to raise rates beyond 38 per month, Boeing's target of 42 per month by year-end is in jeopardy. Boeing is taking corrective action and hoping to return to its prior schedule. The answer to whether they will or won’t meet those targets will likely come at the next quarterly financial results presentation in May. This would be consistent with Boeing's longstanding communication practice, which states that things are going just fine until suddenly, they aren’t. That lack of transparency continues while the “unknown unknowns” plague the industry. The Bottom Line Both OEMs have difficulty ramping up their production rates in the post-pandemic environment. While some issues are supply-chain related, others are production process related, as both OEMs attempt to move to pre-pandemic production rates. With the loss of skilled and trained operators, new procedures and systems to ensure against quality escapes, and higher regulatory scrutiny, the process is proving more difficult for both OEMs. We’ve scaled back our production forecasts, recognizing that complex issues will continue to impact aircraft production as “normality” has still not been reached. Airbus's target of 55 per month and Boeing’s target of 38 per month will move to the right and likely not be achieved until 2026.

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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