There is something vaguely ironic about Boeing outlining continuing production delays and, in the same breath, of the need to shed production staff. The irony is, however, a reflection of the underlying turmoil in the civil airframe industry - a turmoil which has to some extent been hidden by the continuing euphoria of a record market, and which will affect a lot more businesses than Boeing's before the next cyclical downturn strikes.
It is all too easy to dismiss the Boeing conundrum as being entirely one of its own making. True, it miscalculated the ramifications of selling more aircraft than it (or its supplier base) was resourced to produce, and it may have been guilty of pursuing market share at the expense of common sense, in a bid to lock customers into long-term relationships which might damp out future peaks and troughs in demand.
In part, however, the problem it faces is fed by a market which has continued to order more airliners than it can now fill, or it could reliably expect to fill in the future - and that is true even before the promise of seemingly limitless growth in the Asian market was inevitably deflated. No manufacturer - no matter how prudent it may be, or how suspicious it may be of the long-term viability of such orders - is going to sit back and allow competitors to grab new business from under its nose without a fight. So a market which has not done its sums correctly can effectively blackmail the manufacturers into gearing up production simply out of fear of losing share.
There may be some hedging going on by airlines, with one eye on the eventual necessity to ditch their older, noisier aircraft, especially if regulations are tightened again, either internationally or by some wildcat regional ruling. The European Commission, for one, is still toying with rules which could drive ageing aircraft out of the active fleet quicker than had been planned. Yet the numbers are hardly significant in the greater equation of world traffic and capacity.
None of that will be of any comfort to the 12,000 Boeing workers who will, on current plans, be laid off in 1998. Nor will the Boeing message that it would expect, anyway, to lose almost that number through normal attrition in the course of a year. Natural attrition rarely selects the same people for departure from a company as would effective business planning, and Boeing is bound to lose some of the wrong people along with the rest. Many in the industry already mutter darkly about the loss of wise old production hands in Boeing's clear-out of the early 1990s and the part which that may have played in the present production crisis.
So despite the often stated intentions of its marketeers to balance supply and demand in the airliner market this time around, Boeing still finds itself playing a precarious ping-pong game of ramping up and ramping down production rates, staffing levels and its supply chain.
How it and its competitors can break this evil cycle seems as difficult as ever, despite the aerospace consolidation which theoretically makes the big manufacturers infinitely more powerful than the customers which still hold them to ransom. Possibly the only way to limit the excesses of ordering would be to re-impose regulation on the market, to limit fleet-sizes in the way that they were in the so-called bad old days.
Nobody would seriously argue for a return to the worst of restrictive practices of regulation, and the high-fare/low-quality services which it bred, but a degree of self-regulation, perhaps through the good offices of the International Air Transport Association (a ready and willing vehicle),might do the industry more good than it suspects. It might rein back the almost reckless multiplication of services now starting to appear in places like Europe as low-cost (and often high-loss) carriers seek to create a new breed of traveller who would often be better off using existing modes of travel. It might strengthen the arm of the industry against the unwelcome (and sometimes unjustified) attacks by environmentalists against its use of fossil fuels by being seen to be responsible. It could cut airport and airway congestion, and improve quality of service through cutting delays.
In short, a brake on growth could be good for everybody - and that would be a much more pleasant irony.
Source: Flight International
