Interesting article published recently in the Independent UK: Boeing is losing over $1 billion per month due to production delays.
About 200 mostly finished planes are sitting idle outside factories, on airfields, and even in employee parking lots. The delays are primarily due to part shortages, including interior components, engines, seats, and temperature-regulating parts.
What are the impacts of delays?
-> Boeing has delivered about 90 fewer planes this year compared to the same period last year.
-> These issues come amid Boeing's already damaged reputation due to recent safety concerns and federal investigations.
-> The situation is raising questions about when Boeing will be able to deliver these planes and improve its financial position.
At Otonomi, we developed a specific product for MRO (Maintenance, Repair, Overhaul) aviation logistics since time-critical parts shipments may result in tremendous losses that aren't covered within shipper's interests/Cargo STP nor carrier's cargo liabilities. Largely liquidated damages, consequential and provisional risks which are incredibly hard to insure and mitigate.
Insurance for delivery delays is crucial for MRO providers and aircraft manufacturers because:
- > Financial protection: It guards against significant losses from unexpected delays.
- > Risk mitigation: Helps manage uncertainties in complex supply chains and production processes.
- > Customer relations: Enables companies to compensate clients for late deliveries, maintaining goodwill.
- > Cash flow stability: Provides financial support during periods of reduced income due to delays.
- > Contractual obligations: Helps meet penalty clauses in contracts for on-time deliveries.
- > Business continuity: Supports ongoing operations during disruptions.
- > Investor confidence: Demonstrates proactive risk management to stakeholders.
Contact us for a demo of our Cargo Delay Insurance product!