The U.S. Federal Aviation Administration recommended that Boeing address four “issues” related to manufacturing and supplier quality in a new report released on March 19. The report details the results of a joint review of the Boeing 787’s design manufacturing and assembly processes ordered after the January 2013 lithium battery fire aboard a Dreamliner parked at Boston Logan Airport. The review team also made recommendations for improved, “risk-based” FAA oversight to account for new business models.
Supply chain management
“Lower inventories and higher utilization suggest a recovery in new jet demand is approaching, though weak used pricing continues to weigh on the market for new jets,” J.P.Morgan North American Equity Research said in its latest business jet monthly report. According to the firm, pre-owned business jet inventory was flat last month on a sequential basis, though inventories are still “down nicely” year-over-year. Pre-owned pricing trends were also little changed.
CHC Helicopters division Heli-One (Booth No. 1804), a global provider of repair and overhaul services for helicopters, now offers overhauled aircraft components and spare parts to other helicopter operators via new customer portals on its website (www.heli-one.com).
Lufthansa Technik Shenzhen (LTS), a Chinese composite materials specialist headquartered at Bao’An International Airport in Shenzhen in southern China, is expanding its maintenance, repair and overhaul capacity. LTS is tripling its workshop and warehouse capacity to nearly 269,000 sq ft and strengthening its presence in the areas of component supply, logistics services and airline support teams for engine services across China and Asia.
Last year “should mark a bottom” for the business jet market, but the path of recovery is “unclear,” according to J.P.Morgan’s latest business jet monthly report. “We estimate that there were about 650 business jet deliveries last year, which would represent a 43-percent decline over five years. Deliveries in 2014 should be up–we estimate by about 10 percent–with help from new and upgraded platforms,” it noted.
Gulfstream Aerospace will break ground on a new product-support distribution center in Savannah, Ga, late this month or early next. It is scheduled to enter service early next year. The new facility, announced yesterday, will house more than 300 employees and approximately $900 million in parts and materials inventory.
Heli-One has enhanced its website so customers can go to its helicopter Exchange Parts Inventory Channel (Epic) pages. The Epic feature enables customers to do more by connecting them to two searchable databases: Heli-One’s exchange component pool database or its surplus parts inventory database of almost 1,900 items.
As the Great Recession moves into its sixth year, the market for used business aircraft remains something of a quagmire, with some models still searching for a price bottom. But there are bright spots where values have stabilized, and inventory overall is headed in the right direction.
For the first time since the used jet market began to unravel, inventory sits below the level of October 2008. Year-over-year for the past four years, more inventory has been departing the market than has been arriving onto the market and this year could prove a continuation of that trend, with inventory already below last year’s 12-month moving average as the market enters what is historically the most active quarter for aircraft sales.
Zenith Aviation, a distributor of Dornier 328 parts and spares, is seeking multiple aircraft parts and spares consignment opportunities. The company recently invested more than $3 million in additional climate-controlled warehouse space and an automated inventory storage and retrieval system. The 44,000-sq-ft warehouse can hold up to 500,000 individual line items. According to the company, the consignor retains title to the parts until they leave the Zenith warehouse.