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.
|Title of host publication||Operations and Global Competitiveness. Proceedings (CD-ROM) of the EurOMA International Conference, 19-22 June 2005, Budapest, Hungary|
|Place of Publication||Brussels|
|Number of pages||10|
|ISBN (Print)||963 218 455 6|
|Publication status||Published - 2005|
|Event||12th International Annual EurOMA Conference 2005: Operations and Global Competitiveness - Budapest, Hungary|
Duration: 19 Jun 2005 → 22 Jun 2005
Conference number: 12
|Publisher||European Operations Management Association, EUROMA|
|Conference||12th International Annual EurOMA Conference 2005|
|Period||19/06/05 → 22/06/05|
Steenhuis, H. J., de Bruijn, E. J., & Heerkens, J. M. G. (2005). Overcapacity in regional aircraft production. In K. Demeter (Ed.), Operations and Global Competitiveness. Proceedings (CD-ROM) of the EurOMA International Conference, 19-22 June 2005, Budapest, Hungary (pp. 1365-1374). Brussels: EUROMA.