Duopoly deliveries update, supply chain is wobbly

Boeing's strike is the industry's focus, and for good reason. Boeing's decision to push back on the supply chain has a significant impact and has not yet been fully processed. Then there's the people aspect, the strike's focal point. The gap between the company and its workers is large, and the differences cannot be bridged yet. These are ominous times for commercial aerospace because there will be no winners, only losers. And that loss impacts the entire commercial aviation silo. Embraer advises customers to hold off on deliveries during challenging times. Passengers are going to be affected, too. It is going to cost more to fly. Look at this chart for guidance. [caption id="attachment_85720" align="aligncenter" width="580"] AirInsight[/caption] The annual peaks rise each year. The two OEMs might not reach last year's total this year. Boeing has fallen far behind Airbus. We've seen this before, and it remains an important metric to monitor. The supply chain has a long tail, and in this industry, that long tail starts perhaps a year or more before a delivery. Then there's the long tail of support after a delivery. The amount of people and finances it takes to keep the process running smoothly is widespread. When Boeing goes wobbly, the whole system goes wobbly. And wobbliness impacts everyone in the silo, including Airbus. The supply chain was in distress before the Boeing strike. That distress multiplied and got much worse. Airlines need new airplanes for two main reasons: they need capacity as travel has recovered and the higher fuel efficiency new models offer. The extra capacity means extra revenue, and better fuel efficiency means lower costs. Airlines can't earn revenue without the new aircraft but must endure higher costs from fuel burn. Now throw another wrinkle; the planned new delivery isn't coming, so the older airplane needs MRO expenses to stay in service. In other words, the lack of that delivery means much more costs. This is not a great scenario. How to fix it? Boeing's labor relations history is not a happy one. The National Labor Relations Board had this filing in 2011. Here's a history of the Boeing/IAM relationship from 1948. That's the bad news. The opportunity is now—Kelly Ortberg, Boeing's new CEO, has a chance to change this history. He can make peace with IAM by forcing a change in management culture. Boeing needs a peaceful labor front because it has enough other issues to work on. Failure to close the gap between the union and the company is putting the commercial aviation silo under stress. The Boeing problem is becoming everyone's problem. This is a baptism of fire, but if Ortberg cuts the Gordian Knot, he emerges as the leader Boeing needs. Across the board, we hear Ortberg is doing all the right things within the company. This is excellent news. Fixing the strike is priority #1. If you can fix that, many other problems (and there are many at Boeing) will become easier to solve.

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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