Aerospace supply chain under pressure to meet increased demand

6 July 2012

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6 July 2012 | Adam Leach

The aircraft supply chain must rapidly ramp up production in order to meet growing demand for more energy efficient planes.

A study published yesterday by consultancy AlixPartners, cited a five per cent increase in airline and cargo traffic and an “acceleration of old-aircraft replacement with fuel-efficient alternatives” as the key factors driving demand. It said plane production must increase by 45 per cent by 2015.

Eric Bernardini, managing director at AlixPartners, said in a statement: “Right now, beneath the surface, every level of the aerospace and defence supply chain is scrambling to accelerate in terms of performance, on-time delivery and service levels. The success of more fuel-efficient commercial aircraft by Airbus and Boeing will eventually drive increased financial performance.”

The report’s finding echoes the sentiment of manufacturer Boeing, which earlier this week issued 2012 market outlook. The plane builder, which this year launched the Boeing 737 MAX model, projected the market for new planes over the next 20 years will be worth $4.5 trillion (£2.9 trillion). It said there would be demand for 34,000 new airplanes, with the size of the world fleet doubling.

Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes, said: “The world’s aviation market is broader, deeper and more diverse than we’ve ever seen it. It has proven to be resilient even during some very challenging years and is driving production rate increases across the board.”

In other sector news, engineering firm GKN has announced it will purchase Volvo Aero, the automotive firm’s aviation division. The company has agreed to buy the business, which manufactures components for aircraft engine turbines in a cash deal for £633 million.

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