Summary

  • Aviation supply chain challenges expected to continue into next year.
  • GE Aerospace tackling shortage of engine parts amid Boeing production targets.
  • Aircraft leasing rates set to rise as airlines turn to lessors due to delayed deliveries.

A senior figure at GE Aerospace has said that global supply challenges will likely continue to impact the aviation industry into next year. A shortage of parts and labor has led to a slowdown in manufacturing and maintenance times, causing a major headache for airlines and manufacturers.

Aviation supply chain problems not letting up

According to a Reuters report, Russel Stokes, head of GE Aerospace’s commercial engines and services, believes the current supply chain snags affecting the aviation industry will prove a challenge “this year and probably next year.”

However, the situation is likely to improve beyond that, with Stokes noting that he is “confident that over time things are going to get better.” Not only are manufacturers struggling to increase aircraft production rates due to supply issues, but in-service aircraft are spending longer on the sidelines during routine maintenance.

A closeup of a CFM Leap B engine.

Photo: Aeromexico

GE Aerospace, formerly known as GE Aviation, is on track with Boeing’s production targets and says it is supporting efforts for a ramp-up in production. Despite a slowdown in production at Boeing as it faces enhanced oversight from the Federal Aviation Administration (FAA), there is still a major shortage of engine parts. GE and Safran jointly produce the CFM-LEAP engine, which powers the Boeing 737 MAX, the aircraft at the center of the FAA’s audit and considerably behind production estimates. As a result, GE has trimmed its own estimates for LEAP production.

Pandemic aftershock

According to GE Aerospace’s CEO, Larry Culp, mass layoffs of skilled workers during the pandemic downturn are primarily responsible for the present situation. The company said it has now deployed around 500 engineers to work on-site with suppliers.

Related

GE Aerospace To Become An Independent Company

The new company will be fully independent by April 2.

Additionally, it is looking to artificial intelligence to overcome supply chain challenges. This includes incorporating an anti-forgery technology used in the art world to detect counterfeit metal materials. The industry has been rocked by material authenticity challenges in the past year – this includes the AOC Technics false parts scandal last year, and a contaminated titanium supply issue impacting both Airbus and Boeing jets.

Leasing rates to go up

With new aircraft production rates lagging, airlines are increasingly looking to aircraft lessors to plug the gaps. Andy Cronin, chief executive of leasing giant Avolon, told Reuters that aircraft leasing rates will continue to go up as more airlines are forced to lease aircraft in lieu of slipping delivery schedules.

ITA Airways Airbus A320neo

Photo: ITA Airways | Avolon

Avolon has understandably benefited from the demand increase, posting a net profit of $107 million for the last quarter, almost double year-on-year. However, according to a report from Aviation Week, industry insiders are even more pessimistic about the industry’s supply chain prospects, predicting the shortage will likely persist for at least three more years.

Do you think industry supply chain problems will persist for the next few years? Let us know your insights in the comment section.

Leave a Reply

Your email address will not be published. Required fields are marked *