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For Boeing, Airbus, new planes bring big birthing pains

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In many ways, these are the best of times for airplane makers such as Boeing Co., Chicago, and France's Airbus SAS.

Their order books are bulging, especially for such much-anticipated new models as Boeing's 787 Dreamliner and Airbus' A380 Superjumbo.

But such innovation and sales success has come at a cost, most notably delays in getting the planes off the ground.

As of mid-March, 892 orders had been placed for the 787, making the plane—the first large commercial jetliner to feature an all-composite fuselage—Boeing's fastest-selling model. Originally scheduled to enter service in May 2008, delays have pushed deliveries back to mid-2009.

Delays to the A380 have created turmoil in the boardroom of Airbus parent European Aeronautic Defence & Space Co. NV (EADS), which had to contend with a series of cancellations or postponements. When the A380 made its first commercial flight last October from Singapore to Sydney with Singapore Airlines Ltd., deliveries were running two years late. Airbus blamed the complexity of cabin wiring, the high degree of customizing, and other production challenges as underlying causes.

For Boeing, one of the key reasons for delays has been a lack of highly engineered fasteners. These shortages are now becoming less severe, Boeing said, but only for the first batch of planes.

"Fasteners are finally within a manageable level on the near-term airplanes," a Boeing spokeswoman said. "We are working on this same issue on the other airplanes."

Boeing produces several plane models, but the problem has been most acute with the 787 because it's a completely new design, with many logistics and new parameters to work out with suppliers.

Boeing is quick to point out that it isn't just the Dreamliner, and Boeing that must contend with the shortage of available fasteners.

"The aerospace industry as a whole is facing constraints due to capacity issues with fastener manufacturers," the spokeswoman said.

It's a challenge that could exist for some time. Boeing is now predicting world airlines will order more than 27,000 new long-haul and regional planes in the next 20 years, a source close to the company who attended a recent Boeing presentation said. Some 45 percent of those orders are expected to come from North America, 24 percent from Europe and 29 percent from the Asia Pacific region.

Yet the fastener shortage doesn't appear to be a major concern for Airbus.

"Airbus is having no problems with fastener deliveries," an Airbus Americas spokeswoman said. "The supply of these types of parts is the best it has ever been."

While she declined to elaborate, a source with close connections to Airbus suggested the European aircraft maker has been able to avoid shortages by building up inventory in the long run-up to the delivery of its first A380 aircraft. The delays gave Airbus the luxury of having more time to secure the fasteners.

Airbus is also believed to source a lot of its fasteners from Europe, particularly from LISI Group (Link Solutions for Industry) in Belfort, France. Meanwhile, Boeing sources its fasteners from many different suppliers, but the two leading ones are Pittsburgh-based Alcoa Inc. and Precision Castparts Corp., Portland, Ore., the source said. In a marked contrast from what is occurring in North America, at least one aerospace fastener manufacturer in Europe is actually seeing a shortage of orders, the source added.

Nevertheless, the source close to Boeing suggested that once production is fully ramped up on the A380, the shortage of fasteners could finally hit Airbus.

"If you look at the size of the A380, in fastener consumption, it's equivalent to 10 (Boeing) 737s. And then when the new A350 gets online, that could put more demand on the fastener manufacturers. This cycle is going on for a long time," the source said.

The Airbus A350, another long-range, wide-body aircraft, is under development and is scheduled to enter service in 2013.


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