Firstly, congratulations are in order for Arnaud Fiscel who has been named as Head of Transportation at Bank of China in London. Arnaud already has his feet under the desk and is in charge of all shipping, rail and aviation with a wide-ranging remit.
The large engine and aircraft original equipment manufacturers (OEMs) are waging a continual battle to ensure their suppliers deliver quality products on time and on budget. The engine OEMs also manufacturer their own components and parts, however the aircraft OEMs have to date outsourced a much larger proportion of their manufacturing needs than engine OEMs. With the takeover of Rockwell Collins and United Technologies (UTC) that is set to change.
When news of the takeover Boeing stated that the merger of the two companies would not be in the best interest of its customers or the industry, adding: “Our interests and those of our customers, employees, other suppliers and shareholders are in ensuring the long-term health and competitiveness of the aerospace industry supply chain. Should we determine that this deal is inconsistent with those interests, we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests.”
Airbus too stated that its main concern was for UTC to focus on their commitments specifically delivering the Pratt & Whitney GTF engines for the A320neo. “We hope that this M&A would not distract UTC from their top operational priority,” an Airbus spokesman told Bloomberg at the time of the deal announcement.
Regardless of whether this merger goes ahead, the two larger airframe manufacturers may seek to ramp up the production of parts in house to provide production and cost security. Airbus and Boeing are already manufacturing nacelles on some of their aircraft types, while Boeing is moving to ramp up avionics production and actuation equipment.
In the aftermath of the financial crisis, OEMs were providing financial support to their suppliers to ensure they could fulfill orders that threatened to slowdown airframe production. Now, the OEMs are moving to produce more in-house that will add to suppliers’ woes. But it makes sounds financial sense. Indeed, it beggars belief that aircraft manufacturers did not seek to have total parts control decades ago. After all engine OEMs have always produced their major parts and components, and as a result have secured a hold on the aftermarket and today the maintenance of products drives profits to a far greater extent than original engine sales.
If one airframe manufacturer were able to secure total control over seating, electronics, avionics, APUs, IFE and all essential systems before other manufacturers then they would have a significant sales edge on new aircraft with aftermarket agreements attached. Airbus has been rushing ahead in this field in some respects as it consolidates its hold on suppliers. Boeing, which was ahead in many respects on the maintenance side, is now closing on the parts supply, more out of fear for margins than an intent to increase them, but all in all this is good for airlines as new aircraft prices should continue to fall relative to inflation and cost to build. For Boeing shareholders, the outlook with full control over parts and maybe even with more bespoke fittings to ensure interiors can only be fitted by Boeing-accredited aftermarket suppliers, would be fantastic. Would an aircraft manufacturer go down the Rolls-Royce route of total control? From a shareholder point of view, of course they should try.
Meanwhile, as Hurricane Irma passes, islands in the Caribbean and the Floridan coast are suffering from the devastation created by this massive storm. FlightAware has released the latest information pertaining to airports and flight cancellations. Between September 1 and September 13, the total cancellations to/from airports in the Caribbean and Florida is 13,136, with total cancellations to/from airports in Florida reaching 9,483 flights.
Airports in the affected region are all closed save for some emergency and military aircraft. Miami Airport is reported to have sustained significant water damage during the hurricane.
Airlink is assisting the rescue efforts.
Airlink's response efforts now include six natural disasters unfolding within the last four weeks. On Friday, an 8.1 magnitude earthquake rocked Mexico -- the strongest they have experienced in a century. And after making its way through the Caribbean as a Category 5 storm, Hurricane Irma has now taken aim at Florida.
Thanks to support from its donors and airline partners, Airlink is helping aid organizations preposition emergency responders in Florida and move search and rescue teams into hard-hit areas in the Caribbean. Eagles Wings Foundation, Global DIRT, Global Outreach Doctors, and Rescue Global are among those Airlink is assisting.
On Friday, United Airlines helped Airlink move a five-person team from charity Global DIRT into San Juan, Puerto Rico. The team will ultimately fly to the US Virgin Islands and nearby British Virgin Islands to conduct canine search and rescue operations, help restore communications capabilities, and survey damage.
You can follow Airlink’s responses to Hurricane Irma, Hurricane Harvey, the earthquake in Mexico, mudslides in Sierra Leone, and flooding in Bangladesh, India and Nepal on its missions page or see Airlink Executive Director Steve Smith give an update about the current work.
Airlink can only continue its support of rescue operations, response efforts, and ultimately, recovery over the coming days and weeks, with help from supporters. If you would like to help, please visit http://www.airlinkflight.org/donate.