The chief executive of Kansas-based aerostructures specialist Spirit AeroSystems told analysts yesterday that commercial aircraft sales could flatten or even decline in 2008.
At the same time, CEO Jeff Turner predicted that any downturn in the civil airliner market will be shallower than any previous episode in the industry’s history.
“In every cycle the trough is higher than the previous cycle,” Turner told analysts at Spirit Aero’s investors day. “Every peak, the peak is higher than the previous peak. I believe that’s a trend that will continue.
“We could very well see a flattening, or maybe a little bit of downturn,” he added. “We can withstand that. We wouldn’t like it but we could do it. [However,] even if we have a downturn, it wouldn’t be as bad.”
Spirit’s strategy for weathering a downcycle depends heavily on how it manages the growth of its production capacity during the upcycle, Turner says.
Spirit is opening new factories in Malaysia and North Carolina. In both cases, Spirit mitigated its exposure to a potential downturn for the industry by leveraging partnerships with its partners.
“We are putting in capacity globally, and we are able to put that capacity in without 100% of the investment,” Turner says.
Moreover, Spirit expects to have several months of lead time in the event of a downturn to gradually transition its production system to a lower capacity operation.
“Clearly we try to watch what’s going on out in front of us and have contingency plans in place,” he says. “Downcycles do come, but they don’t come overnight. So there’s an orderly progression of bringing down production lines.”
Source: flightglobal.com's sister premium news site Air Transport Intelligence news
Source: Flight International
