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.

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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.
Item Type:Conference or Workshop Item
Faculty of Behavioural, Management and Social sciences (BMS)
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