Specialist
Former executive at Kellstrom Defense Aerospace Inc
Agenda
- Competitive landscape including key secular trends and platforms
- Production ramp-up dynamics – inventory management and potential bottlenecks
- Opportunities and hurdles – platform exposure across wide- and narrow-bodies 4. 12-18-month outlook
Questions
1.
What’s the overarching operating environment for tier 1 and 2 aerospace suppliers? Which key secular dynamics should we monitor?
2.
Why have lower-tiered players fared better or worse throughout the pandemic? Could you expand on that separation across the different levels of supply chain?
3.
Which tier 1 OEM suppliers are positioned better or worse vs competitors? How about some of the tier 2, casting and forging players, or on the aftermarket side?
4.
Have any players particularly struggled with the fixed cost absorption challenges and how might that rectify itself or evolve over the next few years? What changes could occur with those contracts?
5.
Do you anticipate lower tier supplier relationships or contracts changing in the future? Coronavirus definitely exposed some weaknesses and risks associated in aerospace. Do you think anything will significantly change because of the pandemic?
6.
What are the considerations around legacy platforms or systems and the age of existing fleets or potential retirement of older fleets? What demand should we expect from airlines for newer planes? How could the potential USM [used serviceable material] dynamics alter the aftermarket?
7.
How are you assessing the ramp-up capabilities of the tier 1 and 2 suppliers as demand picks up, especially around personnel? Drastic cost-reduction actions were necessary during the pandemic, but how might this align with the required labour to ramp back up to demand projections?
8.
What will you track to potentially ease any fears around shortages? Presumably there’ll be more pilot data but is there anything to follow on the maintenance side or the touch services required?
9.
The 737 is driving a lot of profit recovery down the value chain, but how are the different players and areas exposed, especially Spirit’s agreed delivery of 160 fuselages and shipsets? Do you expect Boeing’s Wichita inventory to take longer than expected to burn off? How are you assessing Spirit’s positioning given that it’s been over two years and the 737 situation is still being rectified?
10.
Do you think Spirit could handle another disruption with the 737? There have been multiple issues over the past two-plus years, especially due to waiting for the Chinese recertification of the 737. Could Spirit survive if there’s another grounding or event?
11.
Do you expect any major industry consolidation and if so, which supply chain players and at what level? You alluded to OEMs potentially bringing some parts of the supply chain in-house, but how might the competitive landscape evolve?
12.
How effectively have companies managed inventory and is there any risk or any specific degradation of the inventory that isn’t being used or shipped out? There’s always the considerations around composite materials too, but is there anything additional to highlight?
13.
What’s your 3-5-year market outlook? What key questions or areas should investors examine for a longer term forecast?
