Boeing’s delivery delays, airline order cancellations and profit impact

An article in the Wall Street Journal (August 24, 2012) describes a decision by Quantas Airlines to cancel orders for 35 Dreamliner airplanes. Delivery delays meant that the promised 20% fuel efficiency and 30 % lower maintenance costs did not arrive in time to help Quantas’s profitability. At the same time, analysts suggest that Boeing loses $100 million for each plane delivered due to penalties and cost overruns. In addition, other analysts suggest that the order book had 30 to 40% more planes than the industry needs. Is this dismal performance the result of an aggressive design or an unwieldy global supply chain ? Could more effective manufacturing management have prevented this purported outcome ? Or is this the result of a global slowdown in economic activity, that would have occurred independent of Boeing’s actions?

Advertisements

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s