Aerostructure suppliers have been hit by one crisis after another for several years now. Their debt is piling up inexorably. Some small players already went bankrupt, while others of international stature are in the process of being restructured. For themis essential to return to a healthy financial situation as quickly as possible, so as to support the air transportation recovery and the production ramp-up and, preserve or strengthen its market position.
The manufacturing of aerostructures is a capital-intensive, highly competitive business, with low operating margins and high working capital requirements (WCR). The succession of crises such as the B787, B737 Max, Covid, recent limitation of B737 MAX production ramp-up following quality problems, has had a major impact on all players in this market. Debt levels are historically high.The operating cash flow generated is insufficient to finance all requirements: higher interest payments on debt, debt repayment, recruitment and training, investments linked to increased production rates, research and development in some cases. Aerostructures players have relied and continue to rely on debt.
