Scott Donnelly: Well, we really haven’t seen that. I mean I think the whole industry is in a similar situation. If we were in a situation where you couldn’t get an aircraft for 18 months to 2 years and somebody else had an aircraft they can get tomorrow, then yes, you could lose that customer. And I think, obviously, somebody could go buy a used aircraft or something in that nature. But I think right now, the whole industry is in this situation. And frankly, it’s where this industry should be. I mean these are complicated assets. There are a lot of times, customers already have aircraft. They need to sell their used aircraft. So look, remember, this industry actually worked like this way for a very, very, very long time. The aberration has been since 2008 to the last 2 years ago where you didn’t have much of a backlog in this class.
Generally speaking, this industry has been a backlog business. It should be a backlog business. By the time you specify your craft and configure aircraft and customize the aircraft, this is — really where we’re sitting today is what normal should look like, not what we’ve seen in the past 10, 12 years.
Doug Harned: Now when you get to the situation, though, which is clearly a good situation, the solution always is to add capacity, and we’ve seen that happen in past cycles as well. When you look out today, what things would you want to see to make material increases in your production capacity?
Scott Donnelly: Look, I don’t think it’s our production capacity so much. I mean obviously, we’re struggling through some of these supplier issues, and you don’t hear it tactically. But remember, as we talk about the delivery times, what our team is out there selling as we look at that backlog, they’re selling aircraft and serial numbers that are delivered at certain dates. So that’s how you manage this backlog and then you’ve got to make sure that you dial in your production schedule to match what those committed delivery dates are. So if you start to see a softening in the order rate, then you’re going to sell out fewer of those slots in the future and then you would adjust your production. If you all of a sudden say, hey, 2025, it looks like you could have 5 more latitudes or 10 more M2s, then you do that and you modulate your production capacity accordingly.
But I think as long as you’re out there looking at these sort of 12, 18-month, 2-year kind of timelines, it gives you the ability to do that. And again, how this industry has always worked.
Doug Harned: And just one last thing. When you look at the constraints coming from the supply chain, are there some specific areas right now that you would point to as most difficult?
Scott Donnelly: Yes. I mean I can tell you a couple of part numbers that are our biggest challenges. We’re not going to do that. I’m not going to throw particular suppliers under the bus. But yes, there’s a couple of particular products, a couple of particular technologies from a couple of particular suppliers that are our biggest constraint. I mean there’s always a bunch of little stuff going on, but for sure. If you get a couple of these guys back in line, that would be very helpful. And again, that doesn’t mean we turn that into, all of a sudden, delivering a lot more aircraft because, again, we’ve committed dates to our customers. It’s a lot more for us right now about getting rid of all the inefficiencies in our production runs where we’re having to build aircraft and swap parts around and do things out of sequence. It’s very, very harmful running a good, smooth production operation when you’ve got to go chase all the stuff around.
Doug Harned: Okay. Great. Thank you.
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