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April 23, 2024
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The Pacific Northwest Aerospace Alliance (PNAA) describes itself as “a coalition of aerospace companies that serve North America’s largest commercial aerospace manufacturing cluster which centers round The Boeing Company just outside of Seattle, Washington”.   All aerospace clusters have umbrella organizations that allow its regional members to meet and discuss issues that pertain to its specific needs.  The PNAA is the umbrella organization of the world’s largest aerocluster, based in Snohomish County, north of Seattle.

We spoke with two of the PNAA’s senior leaders at their annual event yesterday and they shared something about the history and the purpose of their annual event with us. On the left is Fiona McKay, Business Development Director and on the right is Melania Jordan, CEO.

It is remarkable how much of what we see today in US-based commercial aerospace and air transport started in this region and was focused around one man, William Boeing.

Frederick Rentschler is not a name many remember.  He went on to start another storied name in US aviation history, Pratt & Whitney.   This chart helps explain why for so many years United Airlines remains a key Boeing customer and tended to use P&W engines up through the first 777-200 deliveries.  They are, essentialy, family.

We also got to speak with three leading industrry analysts at the event. These three people, all in their own way, offered insights into what seems like a never ending super cycle. This next chart bcame from another one of the three analysts and shows how the super cycle seems unstoppable.  Of course the super cycle must come to an end, just not yet it seems.  This trend does however play a crucial role for what is coming.  These analysts pointed to the supply chain and what may be coming.

We asked each of these three how they view the PNAA and then what were their top three takeaways from the current event.

First, Kevin Michaels, managing director at AeroDynamic Advisory, who produced the Boeing history chart above.

Next we spoke Richard Aboulafia, VP Teal Group, at the who offered the super cycle chart.

Then we spoke with Michel Merluzeau from AIR.

The expected move by Boeing down their supply chain is going to be disruptive.  To achieve its profitability goals, Boeing is likely to cherry pick items that offer long term revenue streams.  The example of aircraft seats was cited.  Because of its size Boeing will create waves.  As a presentation by Triumph Group noted, they supply Boeing, Boeing supplies them and in the future they will also be competing with Boeing.  This could be get messy. But this is what comes with creative destruction.

As the supply chain takes on even greater stress, firms in the supply chain are going to grow larger by mergers and acquisitions.  Everyone needs to drive down their costs.

But this drive for reducing costs also may be a good time for those thinking about entering the supply chain.  Any firm that, for example,  has developed some clever method of deploying advanced technology (additive manufacturing is a prime example) becomes a prime target.  Don’t just think about the “genius in a garage” – the example of Bombardier’s Shorts plant in Belfast was mentioned because of its clever wing manufacturing process.  Or the deep taltent pool of engineering prowess at San Jose dos Campos in Brazil.  Literally everything is on the table; being evaluated and viewed as a potential part of the puzzle to create the most efficient aircraft making process.

Airbus and Boeing are going to search far and wide for these sources of “excellence”.   While the PNAA is focused on the giant Boeing footprint in the region, it is clear by seeing the attendees, that the reach of the region is global.  What PNAA event highlights is what every aerocluster is goign to face, sooner or later.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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