Spirit AeroSystems, a major supplier of parts for jetliners, has asked Boeing and Airbus to absorb more of the financial pain caused by inflation that makes its contracts “not sustainable”, Spirit CEO Tom Gentile said on Thursday Sep. 7.
Speaking at a Morgan Stanley conference, Gentile said that the company was facing higher costs for raw materials, labor and logistics, which were not covered by its long-term contracts with the two plane makers. He said that the company was in discussions with Boeing and Airbus to renegotiate the terms of the contracts and share the burden of inflation.
“We have to get some relief. It’s just not sustainable,” Gentile said. He added that the company was also looking for ways to improve its productivity and efficiency to reduce its costs.
Spirit AeroSystems is one of the largest suppliers of fuselages, wings and other components for Boeing and Airbus aircraft. The company has been hit hard by the pandemic, which reduced air travel demand and forced Boeing and Airbus to cut production rates. The company also suffered from the grounding of the Boeing 737 MAX, which was its biggest source of revenue.
The company reported a net loss of $185 million in the second quarter of 2021, compared to a net loss of $163 million in the same period last year. The company’s revenue fell 33 percent to $1 billion, as it delivered 184 shipsets, down from 274 in the second quarter of 2020.
Sources: AirGuide Business airguide.info, msn.com, Spirit AeroSystems
