The Role of the Aerospace Manufacturing Industry

The last 21 months have been the most volatile period in the history of commercial aviation. The industry experienced peak aircraft deliveries in 2018, with Boeing and Airbus hitting 1,860 combined aircraft and the supply chain continuing to ramp up production.

FREMONT, CA: The most turbulent time in commercial aviation history has been the last 21 months. Peak aircraft deliveries for the sector occurred in 2018 when Boeing and Airbus delivered 1,860 aircraft. The supply chain then worked to increase output from that point on. Then the Boeing 737 Max was grounded, immediately followed by the start of the COVID-19 global pandemic.

Worldwide passenger demand, the lifeblood of the commercial aviation ecosystem, has evaporated, throwing the entire industry into a state of upheaval. The biggest year-over-year loss in passenger demand ever recorded fell by nearly 70 per cent from the year before. In 2021, there was a split in the recovery, with a surge in passenger demand in major domestic markets. The main drivers of the increase were pent-up desire for vacation travel and some workers' sanity being endangered by the boredom of virtual conferencing.

The pandemic has put all current standards and the aircraft sector's forecasting ability to the test. From 2004 to 2018, aerospace manufacturers benefited from almost constant improvements in production rates and the launch of new programmes. Early in the pandemic, the V-shaped recovery and speedy recertification of the Max were the most popular headlines in the trade publications, highlighting the tendencies many experts and market participants expected to see.

The industry once more had to deal with the enforcement of travel restrictions, lockdowns, and aircraft cancellations due to COVID's return in the form of the Omicron variety. One of the pandemic's least-covered stories is the connection between liquidity and production, according to a specialist who spends most of his waking hours assisting clients with ways to boost their performance and liquidity. Although major corporations, such as aircraft OEMs and significant Tier 1 suppliers, receive most of the press attention, a sizable portion of the

industry's annual component and assembly needs are primarily supported by lower middle-market, privately owned or private equity-backed component manufacturers. These businesses have survived the pandemic because of sustained OEM and Tier 1 purchases, government cash injections, and lenders' resistance to writing down non-performing loans. Since those sources of liquidity have now mostly dried up, many businesses are left with high debt ratios and limited access to operating capital, making the industry-wide recovery hard.

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