Industry looks ahead to 2010

Production levels will remain high through this year — whether the airlines need the new planes or not.

The Air Force tanker battle will continue to be a challenge — and a headache — for the Pentagon.

Both Airbus and Boeing will have to deal with the fallout from very different decisions regarding outsourcing.

Those are some of the key points made by Flight International in its annual look ahead at what’s in store for the aerospace industry.

As far as production goes, both Boeing and Airbus worked flat-out in 2009 to produce a record number of jets — about 950. Neither company has provided detailed guidance on its plans for 2010, but Flight estimates that this year they’ll combine to deliver about 870 jets. That’s down from 2009’s record, but still within the range of their output in 2007-08.

Whether they should build that many is another story. Flight talks to Teal Group analyst Richard Aboulafia, who argues that given how few people are flying right now, due to the global recession, it makes no sense for airlines to be expanding their fleets. But Boeing Capital Corp. executives argue that the high cost of fuel is giving airlines plenty of incentive to replace their older jets with more-efficient new ones, and say that financing will be available for airlines to pay for the planes they have ordered.

Whatever the case may be, Aboulafia projects that jet production will continue at roughly current levels through 2010, which is good news for our District 751 members who will build them.

The year 2010 will mark the 10th anniversary of the Pentagon’s first attempts to replace its aging KC-135 tanker fleet, Flight notes. Just like the first two attempts, this third round of bidding for the tanker is likely to be contentious, the magazine says, and the outcry could hit a peak within a few weeks, when the Department of Defense is expected to settle the final list of requirements for the plane it wants to buy, either the Airbus/Northrop Gruman KC-30, or the Boeing -built KC-767.

District 751 strongly supports the Boeing bid, seeing it as the best option for the warfighter, the taxpayer — and the U.S. economy.

But one thing the union hasn’t supported is Boeing’s failed outsourcing strategy with the 787, which led to the company being forced into spending billions of dollars last year to acquire the South Carolina-based operations of two key suppliers — Vought Aircraft Industries and Global Aeronautica. Now the company faces the difficult — and costly — chore of integrating its checkered new Charleston operation into its historically successful Puget Sound-based Commercial Airplane business some 3,000 miles away.

Compared to that, Airbus’s outsourcing challenges are simple, says Flight. “Looking ahead,” the magazine says, “Boeing will be the worse off.”

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