Commercial aircraft manufacturers typically stockpile orders to make a big splash at one of the major airshows such as Paris.
Even in that context, though, the flurry of announcements from Boeing in the past week has been an attention grabber.
Garuda Indonesia, 30 787-9s and up to 30 737 Max 8 jets (and confirmation of an earlier order for 50 of the Max 8). EVA Airways, five 777 freighters. Qatar Airways, 10 777-8xs and four 777 freighters. Ruili Airlines (China), 30 737 Max jets. SMBC Aviation Capital, 10 737 Max 8s. Minsheng Financial Leasing, 30 737s (a mix of the existing models and the Max). Korean Air, 30 737 Max jets. AerCap, 100 Max 8s.
That’s not a comprehensive list even of those that had been announced at the time of this writing. But even that incomplete tally is a convenient opportunity to remind ourselves that the health of the aerospace industry matters a lot around here.
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And to judge by admittedly superficial measures — order announcements and market projections — the current condition of the aerospace industry generally and Boeing in particular allows for a bit of cautious optimism.
If that level of enthusiasm seems a bit underwhelming, let’s review the normal disclaimers, cautions and caveats. Orders are not the same as purchases and deliveries. Airlines can change the number of planes they order, or bail out entirely if conditions sour. Plane models wax and wane in popularity (while the Max is ascendant, the venerable 747 appears to be in the sunset of its career, although Boeing did announce a deal for 20 747-8 freighters with a Russian company).
Internally, Boeing has to be able to deliver planes on time and budget, always a tricky proposition when dealing with a new plane such as the Max (although so far that program has generated far fewer headaches or headlines than the 787). Externally, there’s always Airbus, which had its own fistful of orders to show in Paris, plus new entrants such as Bombardier with its C Series.
From a parochial standpoint, there’s also the matter of where all those planes will be built. Boeing continues to squeeze more production out of the Renton plant. But South Carolina looms with lots of room to expand. When discussion turns to new models beyond the Max and 777X — now Boeing is floating the trial balloon (a metaphorical one, unless it intends to add that to its portfolio of aircraft) of a plane to succeed the 757 in the range-and-capacity gap between the 737 and the 777/787 sector — that invariably raises the question of where those planes will be built.
That’s a lot of uncertainty to pile on one industry, and it should counterbalance any tendencies toward over-optimism. And yet fuel prices are comparatively low, allowing airlines to make money and buy planes. Same deal with interest rates. The economy can’t be described as robust, not here, not globally, but people seem willing to travel for business and pleasure. Boeing’s 20-year forecast of global demand for new aircraft, at 38,050, is up 3.5 percent from last year’s outlook.
Take that as a prediction, not a certainty, but what is not in doubt is that it’s still aerospace that flies Washington’s economy. Released the same week as the plane-order announcements in Paris was the Employment Security Department’s monthly jobs report. The preliminary May numbers show the aerospace product and parts manufacturing category at 91,700 jobs, down 1,200 from the same month a year ago but still by far the largest within manufacturing.
That 91,700 number pales in comparison with the totals for other sectors such as construction and retail trade, but it’s a good bet a lot of jobs in those other categories don’t exist without the direct or indirect influence of aerospace. Tech gets the buzz, and within a specific geographic region its influence is outsized. But aerospace’s reach across the state is much broader (Pierce County can count itself as a part of it, but the sector extends to places such as the Yakima Valley, Moses Lake and Spokane).
Tech also is harder to track because it’s harder to neatly categorize what’s in it. Is Amazon a tech company or just a retailer without stores? For that matter, what is a commercial airliner if not a tech-intensive product?
During the recession aerospace (along with ag and tech) was one of the props under Washington’s economy that kept it from looking even worse. For an industry that has historically been a defined by boom-and-bust cycles, it’s remarkable that a bust, in the form of a sated market or airlines canceling orders as happened post 9/11, didn’t occur.
Aerospace’s importance to the state’s economy isn’t exactly an underreported story, but the sector’s current sustained run may be under-appreciated. Certainly we’ll appreciate it when it’s over and we’re feeling the resultant economic pain; if this week’s orders and forecasts are to be believed, it may be a while before we have to face up to how good we’re having it.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. Reach him at firstname.lastname@example.org.