Some Silly Comments About Boeing and Airbus

A few “industry analysts” recently commented that they think Boeing and Airbus are making a mistake by ratcheting up production:

“We are in a bubble,” Adam Pilarski, a respected industry analyst with consulting firm Avitas, told his audience of airplane lessors and financiers.

He said the announced production rates of 42 single-aisle jets per month from each plane-maker by 2014 would result in 5,000 more narrowbody jets being built over the next 20 years than the two companies’ own forecasts predict will be needed.

He then goes on to say:

“You still want to enjoy it while it lasts. Why not? Eventually the bubble bursts — too bad. If I were Boeing or Airbus I’d do exactly the same thing.”

Huh?  Bubble or not, Boeing has a historic backlog of orders.  As far as I know, all of those orders have some sort of a deposit.  Sure, some of the longer lead (and larger orders) may not come to fruition.  But, for now, why wouldn’t you make every single plane you could, within reason?  The 787 alone has a backlog of 1000 planes.  Maybe plane #1000 gets cancelled, but it’s a pretty good bet the first few hundred are a lock.

I don’t know much about the way Airbus builds planes, but I’ve been to Boeing enough now to know they run very efficient assembly lines.  The great things about assembly lines is they can be sped up, slowed down, and stopped.  If Boeing thinks it’s producing too many planes, it can adjust it’s pace.

They can’t stop on a dime, but I suspect there will be enough warning signs of a slowdown to start scaling back orders for products.

 

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My goal in life is to fill my family’s passports with stamps, creating buckets of memories along the way. You’ll find me writing about realistic ways for normal people to travel the world, whether you’re on a budget or enjoy luxury. I also enjoy taking us on the occasional detour to explore the inner workings of the travel industry.

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