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And you've read articles that some of those upgrades will be available subject to the certification requirements later in 2025. And then progressively, I'll say, launched with each of the aircraft manufacturers over the next couple of years. And it doesn't matter whether it's a LEAP-based engine or a GTF engine, and we're working on the upgrades for all of those.
working on upgrads
Transcript
2024 Q2
2 Aug 24
So, the way I look at it is that we are producing well above engine build rates. And then we don't know, first of all, the outcome of what the subsequent processing is for our [indiscernible] and nor do we get to have any view about where do they go in terms of how we build versus MRO, so you'd be -- sort of sales.
And so I guess the way I look at it is, for Howmet, the opportunity appears to be there to sell even more if we're able to make a few more. But at the same time, there are adverse consequences upon us because if engine build is down, and you heard it in our guidance, that we've taken the engine build assumptions down to be in line with what we've heard from the engine manufacturers in recent times. And you've seen that those have been significant rate reduction, whereas previously, we've been prepared to meet those.
And so when you get that, even though we have the demand opportunity to supply into the MRO market through our customer.
We also suffer because if a lack of an engine build, then obviously, we're not able to supply any structural castings that we indeed manufacture. Nor are we able to supply parts in the low-pressure part of the turbine.
And so given the recent, I'll say, build restrictions, we actually have some excess label short-term working in some of our French plants because of the LPT demand.
building in excess of engine build rates
Transcript
2024 Q2
2 Aug 24
However, the issue being faced by Howmet is not the demand but rather that sales are currently constrained to some degree by the ability of aircraft manufacturers to build and deliver aircraft on a consistent basis. These facts are the subject of many press articles and this little point in repeating those facts here.
While Airbus is steadily increasing requirements while building below desired levels and slowing its volume run, the larger concern is Boeing.
While parts orders directly from Boeing shows some trimming, they continue to be at levels above the actual 737 and 787 build rates.
Engine orders have also been trimmed, albeit by a large percentage.
Given the situation, the question surrounding Boeing and its affiliates inventory positions and liquidation of such inventory remains. We've tried to derisk this to a large extent in our guidance. And notably, update our assumed 737 build rate to 22 aircraft per month in 2024 versus the previous view of 20 per month. Naturally, we hope for a higher build on [ it ] and also the future rate increases.
In the case of Defense, the ou
aerospace commentart
Transcript
2024 Q2
2 Aug 24
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