Overcapacity in regional aircraft production

H.J. Steenhuis, E.J. de Bruijn, Johannes M.G. Heerkens

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Abstract

Capacity decisions are among the most important operations decisions for companies. One of the potential outcomes of bad decisions is a resulting overcapacity. Although some textbooks treat overcapacity as an issue for individual companies, there are indications that it may be an industry wide issue. This paper describes the global regional aircraft industry, comparing the demand and available production capacity. A small number of companies is active in this industry and a larger number of companies are starting or planning to start production. Under these conditions, the probability of overcapacity is high. The analysis shows that a number of structural factors exist that cause individual regional jet manufacturers to make capacity decisions that are not beneficial for the industry as a whole. Overall, in this type of industry, once the decision has been made to offer a new aircraft type, manufacturers do not have many options to prevent overcapacity situations.
Original languageEnglish
Title of host publicationOperations and Global Competitiveness. Proceedings (CD-ROM) of the EurOMA International Conference, 19-22 June 2005, Budapest, Hungary
EditorsK. Demeter
Place of PublicationBrussels
PublisherEUROMA
Pages1365-1374
Number of pages10
ISBN (Print)963 218 455 6
Publication statusPublished - 2005
Event12th International Annual EurOMA Conference 2005: Operations and Global Competitiveness - Budapest, Hungary
Duration: 19 Jun 200522 Jun 2005
Conference number: 12

Publication series

Name
PublisherEuropean Operations Management Association, EUROMA

Conference

Conference12th International Annual EurOMA Conference 2005
CountryHungary
CityBudapest
Period19/06/0522/06/05

Keywords

  • IR-73599
  • METIS-224573

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