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The world, and our aging United States appear to be under the influence of the “System of Doctor Tarr and Professor Fether” lately (aka the system of soothing – check your Edgar Allan Poe for an explanation). In between multiple customer engagements, our team sat down “virtually” last week to discuss the evolving crisis and attempt at striking a more positive and forward thinking tone about what lies ahead (yes, the Earth and the Sun do indeed continue their gentle cosmic dance and, as we like to say it often, “this too shall pass”).
“PFS v4” has landed, it is called Boeing Premier Bidder.
While the rationale behind PFS was driven by a combination of circumstances and necessary reset of the relation between Boeing and its supply chain, we view the Boeing Premier Bidder programme more as an evolutionary development of the incessant, reactive and unfocused supplier management approach from Seattle since 2013.
Boeing supplier management seems to lack consistency, and has mostly been driven by
This week’s note looks at the business aviation outlook to 2030. We have often connected the health of the business aviation market with other variables such as financial markets performance and corporate profits. Historically, there has indeed been a very strong correlation between aircraft orders and financial trends. However, the financial crisis of 2009 proved that this trend no longer applied…
Production rates are a moving target these days. Boeing, Airbus, COMAC and Embraer have planned and adjusted production output based on anticipated demand recovery cycles, and which are based on a still rapidly evolving crisis. What happens in the next 6-12 months remains very
Airbus has announced significant cuts to several of its operations on 30 June , primarily in Europe for a total of nearly 18,000 jobs (including ADS), including 1,300 positions worldwide. This roughly matches Boeing and is in line with the severe contraction associated with the collapse of air traffic demand due to the current COVID pandemic.
Airbus also has other urgent issues to address, these are different from Boeing’s dire situation but those will need prudent responses if needed. While Boeing is currently severely impacted by the aftermath of its 787 and KC-46 development mismanagement and the current MAX regulatory and technical crisis, Airbus is faced with existing and potential challenges that will sequence themselves over a period of 15 years, and that may alter the course of the enterprise with varying degrees of severity.
Please join us June 30 at 9am pacific/noon eastern for a live presentation and discussion of the outlook of Airbus in a post pandemic environment and significant economic and geopolitical uncertainty. This webinar will be hosted by the airinsight.com team, the media side of the group.
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It is unquestionable that the commercial aerospace industry is facing a near term existential crisis. While the situation at aircraft OEMs is daunting, Boeing is faced with challenges that currently gives Chicago absolutely zero margin for error. In the event of another delay or setback(s) for the airline industry, we believe that Boeing will be faced with few options but to contemplate Chapter 11.
Massive Reset
We will be releasing a lengthy notes about OEMs and Suppliers strategic options tomorrow. In the meantime, here is another update to 2030 as to the likely impact of the COVID crisis on the entire aerospace and defense segments. This is a snapshot of the current situation as of May 2020 and the segment that may get impacted further as the crisis evolves in other parts of the world.
And the topic goes on… We have amply covered the MAX crisis over the past 24 months but perhaps need now to recalibrate our position as the market environment will profoundly alter competitive dynamics in the next 3-5 years.
The events of the past 24 months have indeed pushed the 737 MAX into a downward spiral. Two accidents, resulting civil and criminal lawsuits, and a regular stream of technical flaws, mismanagement…
The results are in, and as expected. The COVID crisis will be felt until the early 2030s and both Airbus and Boeing are at a critical juncture of their history.
The questions are now relatively simple: what market environment is to be expected in the next decade? What will be the impact on the competitive environment and finally what strategic direction should the industry adopt to adapt and grow in a scorched commercial market landscape.
Boeing’s peak valuation stood once at $250B,
Our briefing is available below for all AIR research customers without restrictions.
Please join us tomorrow for a live presentation and discussion of our post crisis market outlook. This webinar will be hosted by the airinsight.com team, the media side of the group.
AIR research customers will receive priority. 50 spots are available.
Please register at…
The COVID-19 White Swan is a cataclysmic disruptor for the global economy and our societies. The human impact will be catastrophic, and it will likely take years to precisely understand the root cause of the disease, its epidemiology and the changes needed to more effectively tackle the next event for mankind.
Devin Lidell, Principal Futurist at TEAGUE said it best in a recent insight that we highly recommend: “so the days of system shock followed by collective amnesia will need to end . The realities of a post-COVID-19 world will pose new challenges to cities and transportation systems in particular”
So, three months into this crisis, what are some of the preliminary lessons learned?
1) We saw it coming but we completely failed to estimate the velocity of the societal and financial freefall.
While January confirmed the possibility of COVID-19 eventually making landfall outside of China, our perspective and framing of a potential response to the epidemic (at the time) was entirely based on still incomplete information
Our revised outlook is available. Three scenarios have been considered for this updated forecast. We are generally positive about the long term industry resiliency. Our concerns that may lead to a more severe regional crisis have now clearly migrated into the geopolitical & societal consequences of this major crisis.
Let us be clear – the disruption and shock to the global system are massive, but there will be a day after, and it is how this day is carefully and resolutely managed that will define the shape of recovery, our societies, and international relations for the next fifty years. Therefore, it must be done right and this day after is possibly as, if not more, important as the management of the current sanitary crisis. History is full of examples of crisis exit mismanagement that led to even worse outcomes.
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On a scale of 1 to 10, the title of this short note may lead to reasonable confusion in the mind of the AIR research customer and probably deserves a 9 for not making any sense whatsoever. It is no accident however. No, the recent PNAA conference has not permanently damaged the mind of this analyst (it was a close call), but one of the panels that we contributed to triggered additional thinking that perhaps is worth of this exercise in extrapolation.
Our panel was titled “the swinging pendulum: trade and protectionism.” Although we continue to disagree with co-panelist Richard Aboulafia (not the first time, not the last time) on the current issues affecting the Chinese economy, we wholeheartedly agreed with Ron Epstein’s comments “You see two spheres of technology and two areas of economic development; so you have a major trading partner who is also a security
This report is part of the Forecast Series available to our research customers until May. This new format will provide you with unique market data customization capabilities.
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Part two of this report will look at suppliers and systems. Commercial markets forecast will be updated this month and in April.
