Updated February 23rd, 2024 at 15:32 IST

Aviation industry grapples with prolonged supply chain strains: Report

European aerospace giant Airbus revealed efforts to alleviate bottlenecks by deploying engineers deep into supply chains.

Reported by: Business Desk
Aviation industry | Image:PTI/File
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At the Singapore Airshow, industry leaders voiced concerns over lingering supply chain challenges that continue to hamper the global aviation sector's recovery from the pandemic. While there are signs of improvement, firms warn that resolving these issues may take up to two years, further complicating the post-pandemic bounce-back in travel demand.

European aerospace giant Airbus revealed efforts to alleviate bottlenecks by deploying engineers deep into supply chains, while maintenance firms like Lufthansa Technik are increasing spare parts inventory to counter delays. However, they acknowledged the severity of the situation, with Airbus and Boeing struggling to meet the surge in demand.

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Michael Szucs, CEO of Philippine budget airline Cebu Pacific, highlighted delays in Airbus deliveries, estimating nine-month setbacks from contracted times. Lead times for critical components have ballooned to 2-5 times longer than pre-pandemic levels due to reduced production, skilled labor shortages, and supply disruptions triggered by the Ukraine conflict.

Roberto Tonna, CEO of aerospace supply chain firm ALA, attributed shortages to factors like the war in Ukraine and reduced skilled labor. He estimated it would take 18-24 months to return to pre-pandemic supply levels.

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Prices for parts have skyrocketed, with increases of 20 per cent-30 per cent observed by maintenance firm First Aviation Services, compared to the typical 3 per cent-6 per cent annual rises. High-performance metals, in particular, face scarcity due to increased demand for defence purposes.

Temporary groundings of planes with GTF engines by Pratt & Whitney, a subsidiary of RTX, have further exacerbated the situation, with inspections expected to continue for years.

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To meet customer obligations, Lufthansa Technik is ramping up hiring, stockpiling parts, and developing in-house repair solutions. The shift from a "just in time" supply concept to a more resilient approach underscores the industry's adaptation to the new normal.

Szucs stressed on the need for operational resilience, necessitating increased standby resources despite the associated costs.

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While profitability returns to the industry, challenges persist, underscoring the complexities facing aviation in the current climate.

(With Reuters inputs)
 

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Published February 23rd, 2024 at 14:01 IST