The aerospace industry is currently facing a series of unprecedented supply chain disruptions that are affecting production schedules, financial forecasts, and operational strategies. Airbus has just revised its delivery target for 2024, now expecting to deliver around 770 commercial aircraft instead of the previously projected 800.
This revision is coupled with a delay in the goal to produce 75 A320 family jets per month, pushing it from 2026 to 2027. These disruptions are a symptom of broader, multifaceted challenges impacting the entire aerospace sector.
Growing Backlogs and Production Delays
Manufacturers are grappling with significant backlogs, particularly for narrowbody aircraft, as recovery is not as fast as everyone would like it to be. Airbus and Boeing, the industry’s leading manufacturers, have seen their backlogs swell due to production slowdowns. As of early 2024, Airbus’s backlog stood at around 8,000 aircraft, while Boeing’s was approximately 6,000.
These backlogs have grown as production slowdowns continue to impact the industry’s ability to meet resurgent demand post-pandemic. The narrowbodies are wanted everywhere, but the reality is that they’re just not there.
Meanwhile, the sky is full. Demand for passenger flights has shot up 15% from last year when we saw the resurgence with the growth as twice as that. Every plane, old or new, is in the air. Retirements are on hold as airlines are keeping the old planes flying because the new ones are still only on paper. The price for used parts has shot up 20%. Everyone’s scrambling for scraps.
Raw Material Shortages and Rising Costs
These days, aluminum and titanium are as rare as kindness in a back alley. Prices keep climbing – 15% for aluminum, 10% for titanium. And that just in half a year. Everyone is feeling the squeeze.
The demand’s gone through the roof since the pandemic. As manufacturers are scrambling to churn out aircraft faster than ever, everybody is aiming to meet the rising tide of post-lockdown air travel. The quest for lighter, more efficient planes doesn’t help as it just means they need even more sophisticated materials.
The pandemic didn’t just mess with people’s lives. It threw a wrench into mining, processing, and shipping too. And we did not even get started on the geopolitical complications. Trade wars, sanctions, and instability from major suppliers like China and Russia only made things worse. The logistics scene is no better: ships stuck in ports, delivery trucks waiting for drivers, and factories grinding to a halt for lack of parts.
Mining and refining operations can’t keep up. According to Toma Matutyte, CEO of Locatory.com, “The current shortage of raw materials and logistical disruptions are testing the resilience of our industry like never before. What is truly alarming this time, is the fact that supply chain challenges seem to become much harder to predict. As a result of that, every new hit finds the industry surprisingly unprepared.”
There is a bottleneck at every turn. The upstream companies simply cannot dig out or process these materials fast enough, and these downstream, including the smelters and alloy producers, are facing their own troubles. Environmental regulations are increasingly tightening, making it harder to mine and process without inflating costs. Meanwhile, some of these precious resources are just plain running out, so, in other words, we are squeezing the last drops from a dry sponge.
Matutyte emphasizes, “Logistical bottlenecks, intensified by global events, are hindering the timely delivery of critical components.” This has prompted the industry to rethink its logistics strategies and invest in robust supply chain solutions.
All this, of course, leads to production delays. Aircraft manufacturers are staring at empty warehouses, waiting for the next shipment that might never come. Component makers are in the same boat, short on everything from engine parts to avionics. Prices are climbing, and those costs are trickling down the whole supply chain. Everyone’s feeling the pinch, from the big OEMs to the guys fixing up old planes in dusty hangars.
Inventory is a juggling act, with companies overstocking in fear of running dry, yet still finding themselves short. Relying heavily on a limited number of suppliers for critical materials has proven to be a risky strategy. The supply chain’s fragility means that a single disruption can lead to significant setbacks, according to some experts. Additionally, research and development efforts are suffering as resources are diverted to address immediate supply issues. “Raw material shortages are causing delays and cost escalations across the aerospace sector,” notes Matutyte. “It’s crucial for companies to diversify suppliers and optimize inventory management to mitigate these risks.”
So, what is the strategy moving forward? The plan involves diversifying suppliers and expanding the search for reliable partners beyond the traditional sources, taking a more global approach. Building strategic partnerships and alliances is crucial to ensure a steady flow of materials. Investing in new technologies and exploring advanced materials will push the boundaries of current capabilities. Additionally, increasing recycling efforts will contribute to sustainability and resource availability. The supply chain requires a comprehensive overhaul, focusing on improved inventory management and optimized logistics to ensure smooth and efficient operations.
“By leveraging advanced technologies and strategic partnerships,” Matutyte states, “we empower airlines, manufacturers, MROs, and other businesses to maintain operational continuity. At Locatory.com, we’re committed to overcoming these challenges. Our innovative approach ensures seamless procurement and distribution of aircraft parts globally.”
In the end, it’s a balancing act, a high-wire performance with the stakes sky-high. The aerospace sector is tough and resilient, and it’ll need every bit of that toughness to get through this rough patch. With the right moves, they might just pull it off, building a supply chain that’s stronger, smarter, and ready for whatever comes next.
Labor Shortages Persist as a Still Growing Issue
Yet, there are also labor shortages which are compounding issues mentioned above. During the pandemic, the aerospace industry saw mass layoffs and manufacturing giants were among the first to do that. Boeing slashed more than 13,000 positions and Airbus cut approximately 15,000 jobs worldwide. Now they need those hands back, but the skilled ones have hung up their hats. The new blood is green, and the old hands are already elsewhere. The Aerospace Industries Association says there’s a shortage of 10,000 skilled workers in the U.S. alone.
Global figures are even more alarming. Oxford Economics reports that the aviation industry has lost more than 2.3 million jobs since 2019, a reduction of 21% compared to pre-pandemic levels. According to the International Civil Aviation Organization (ICAO), by 2026, the industry will need 480,000 new technicians for aircraft maintenance and over 350,000 pilots.
Such loss of seasoned professionals has created a gap in expertise and slowed down the production and maintenance processes. The challenge now is not only to hire new talent but also to ensure they are adequately trained to meet the high standards of the aerospace industry.
Technical Problems with New Planes and Engines
The introduction of new aircraft and engines has not been smooth, with unforeseen technical problems causing prolonged groundings. These issues, often related to sophisticated and untested technologies, have added another layer of complexity to production and operational schedules. For instance, engines that were reliable in 2023 and early 2024 are now presenting significant issues, forcing airlines to ground newer planes unexpectedly.
The number of grounded engines due to recent inspections highlights the potential impact of engine shortages on the aviation industry. Over 1200 Pratt & Whitney GTF engines have reportedly been affected, disrupting flight schedules for multiple airlines.
This incident of course, reminds us of importance which is high when we are talking about maintenance practices and having access to a reliable source of spare parts. Airlines that can effectively leverage platforms like Locatory.com are better positioned to navigate these challenges and ensure operational continuity.
On its part, not long after first GTF engines started to clock flight hours performing the revenue service, Pratt & Whitney introduced the PW1100G Block D standard with the aim of improving engine durability, specifically focusing on the hot section. However, a persistent issue with the combustor liners emerged. While modifications like changes to cooling hole patterns and sizes helped to double the engine’s “time on wing” compared to previous models, a problem with the thermal barrier coating led to premature erosion inside the combustor.
To address this, Pratt & Whitney is implementing a multi-phase upgrade plan. The first phase will focus on improved airfoil coatings, enhanced cooling for the hot section, and upgraded air seals. This will be followed by a second phase that introduces further advancements in airfoil coatings and additional durability upgrades for the hot section, offering a comprehensive solution to the durability concerns.
However, Pratt & Whitney is facing a balancing act. They need to produce new engines designed to remain on wing longer while also supplying enough spare parts for older models that now require more replacements due to the combustor issue. In the meantime, airlines are feeling the impact as Pratt accelerates inspections for hundreds of engines earlier than anticipated, leading to numerous unplanned groundings.
The Future: Rethinking Strategies, Once Again
As these groundings disrupt flight schedules, they also cause financial losses, and are particularly troublesome for carriers operating high-frequency routes where fleet availability is crucial. The technical difficulties with the PW1100G engines have created challenges, but Pratt & Whitney is actively working on solutions. Airlines, however, will likely face short-term disruptions as these issues are addressed.
The once-smooth glide of the aerospace industry has hit a patch of turbulent air. Supply chain challenges have grounded production schedules, and the echoes of pandemic layoffs leave a skills gap. Diversifying supplier networks is no longer optional and emerging technologies like advanced materials and streamlined logistics are being perfected further as the obvious answer to most of the current challenges.
The talent runway is being resurfaced. Training programs by major market players are introduced every week, readying a new generation of mechanics and engineers to fill the positions of the future. Meanwhile, robust maintenance solutions are taking root, ensuring a steady flow of parts and keeping fleets airworthy.
So, for now it seems obvious that aerospace industry is on the cusp of a transformation, emerging leaner, more efficient, and fueled by a spirit of collaboration unlike ever before. The challenges are daunting, but the potential for a stronger, more sustainable future is as vast as the open sky. So, fasten your seatbelts, as innovation is about to take flight.
