Overcapacity in regional aircraft production


Steenhuis, Harm-Jan and Bruijn, Erik J. de and Heerkens, Hans (2005) Overcapacity in regional aircraft production. In: EurOMA International Conference on Operations and Global Competitiveness, June 19-22, 2005, Budapest, Hungary.

open access
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.
Item Type:Conference or Workshop Item
Management and Governance (SMG)
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Link to this item:http://purl.utwente.nl/publications/73599
Conference URL:http://www.diamond-congress.hu/euroma2005/
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