Flush with orders, aerospace industry retools for future

Mon Jun 17, 2013 9:03pm EDT
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By Alwyn Scott

PARIS (Reuters) - As airplane makers gathered outside Paris to show off their newest high-tech jetliners on Monday, a less-heralded technology story was unfolding back home on the factory floors of the world's leading aerospace firms.

The planned introduction of at least half a dozen new plane designs that push the boundaries of flight performance has given the industry its biggest opportunity in a decade or more to automate factories, add new techniques and reduce costs.

In five years, airplanes entering service may have an engine with parts delicately fabricated by an industrial 3-D printer, a paint job applied by a robot and rivets installed by machines.

"The big next leaps will come on the production side - how do we actually produce these airplanes faster, more efficiently, with more automation?" Ray Conner, CEO of Boeing's (BA.N: Quote) commercial airplane division, asked at the Paris Air Show on Monday.

Unlike the car industry, aerospace has been slow to automate. Relatively low production - Boeing and Airbus EAD.PA produce about 1,200 jets a year - often does not justify the big investments required. Complexity and regulation also limit change, meaning much of a jet is still handmade.

But now, flush with a record number of jet orders, the industry is gearing its factories to produce at high volume and low cost. More than 35,000 jets worth $4.8 trillion will be sold in the next 20 years, according to Boeing's forecast.

Cutting costs is the only way to improve margins in a business where steep price discounts can mean selling at slim profit or a loss to win orders.

Since 60 percent to 70 percent of a plane's materials come from suppliers, manufacturers also are pushing them to innovate, and rewarding those that do by splitting the gains.   Continued...

An Airbus employee presents three model airplanes in blue, white and red, made from starch using a 3D printing technique during the opening of 50th Paris Air Show, at the Le Bourget airport near Paris, June 17, 2013.REUTERS/Pascal Rossignol