OEMs - if you're listening...

No, I’m not looking to locate the infamous 33,000 missing emails from the last US election.

But I am concerned that today’s major aircraft and engine manufacturers have taken their collective eye off the ball and appear to have become far too focused on short-term shareholder value and quarterly earnings results at the expense of their airline customers and product quality.

Given the historic, record-breaking OEM order backlogs, production rates, and longest super-cycle of sustained commercial airline profitability, one would think OEM boardrooms would be popping champagne bottles triumphantly celebrating their world dominance.

Sadly, this is not the case.

In both the airline and MRO industries, to earn loyalty from customers and employees, the conventional wisdom mantra for decades has been “under promise, over deliver”.  

This mantra clearly does not apply to many of the major commercial aviation OEMs who have consistently over-promised and under-delivered in recent years.

For evidence, I offer you Exhibit A:

With OEM public relations departments working overtime to temper the damage caused by the so-called “teething pains” of their respective new product portfolios, the repercussions for their customer airlines feels more like root canal.

While many industry observers and pundits blame a toxic elixir of hubris, arrogance, and/or duopolistic complacency, with virtually every major global airframe and engine OEM struggling, this cannot be coincidental, and the industry clearly has an underlying structural issue that must be addressed.

Celebrity CEO Jamie Dimon of banking giant JP Morgan recently declared the end of the long-held view that shareholders’ interests should come first; “The purpose of a corporation is to serve all of its constituents, including employees, customers, suppliers, investors, and society at large”, Mr. Dimon stated.

For the past half century, these same OEMs enabled the miracle that is today’s modern commercial aviation, and are responsible for what is, without a doubt, the safest mode of transportation the world has ever seen. By refocusing their attention to supporting the needs of their customers, employees, suppliers, and community first, only then can they achieve their shareholder value objectives.

OEMs, are you listening?

Jonathan M. Berger is Managing Director of Alton Aviation Consultancy, a global aviation and aerospace advisory firm. For more information, please visit https://www.altonaviation.com/.