Peaks of demand, like the one expected next summer, could derail the ongoing resurgence in global passenger numbers, warn experts wary of industry disruption continuing into 2024.

This year will conclude with almost record commercial aviation passenger numbers, as 2023 is on target to come within a whisker of matching 2019 – the last complete year before the pandemic took hold.

Next year, as even more passengers return to the skies – boosted by China’s decision to lift almost all its restrictions in September – a new record will be in sight.

Or will it? The consensus among the experts at this year’s MRO Europe, who took the time to share their predictions for 2024 with the Satair Knowledge Hub, is that the industry might be held back by disruption to its supply chain.

A worst-case scenario in the Northern Hemisphere next summer, the busiest period for global aviation, could see many planes grounded by a lack of parts, warns Ivan Gonzalez Vallejo, Director of MRO Strategy and Supply Chain at Iberia Maintenance:

“We're not building enough parts to satisfy the demand we can see around the world. I really hope for next year’s summer season we’ll have all aircraft in good shape and flying. But those living and breathing day-to-day in the supply chain are struggling, and they need some relief.”

It is during peaks of demand that the supply chain is most vulnerable, concurs Daniela Serafini, VP of Customer Services at Satair.

Too few parts the main hindrance to supply chain

The disruption is the result of a multitude of reasons, explains Vallejo, but it all boils down to one simple cause: not enough parts. This means that:

  • Retirements are slowing down, as are new plane purchases, and the dismantling rate is rapidly decreasing 
  • The major plane producers, the Original Equipment Manufacturers (OEMs) ultimately responsible for the most spare parts, are decreasing their output due to lower demand
  • OEMs barely have enough spare parts to honour the commitments they make when they sell planes, so the number ending up on the aftermarket is limited

Vallejo attributes the shortages to the poor predictive capacity of the Maintenance and Repair Organisations (MROs) and the weakness of the supply chain as a whole.

“Both the manufacturing and repair capacity are restricted in what is a weak supply chain because a lot of the supplies are single source, which makes the full system very weak. This is where we need to focus over the next few years so that everybody plays a part.”

Certainly, he believes the MROs are already working closer with the OEMs to enable the market to anticipate priorities and better plan for the future.

But are the MROs optimising their repair capability? Serafini suggests they embolden the supply chain by expanding their focus beyond the defective components of a part and repairing them all.

More effort needed for the greater good of the chain

For all the energy the new MROs bring to the industry, they are often held back, laments Vallejo: 

“Some OEMs have the opportunity to grant licences to carry out extensive repairs to upcoming MROs focused on creating more capacity in the system. And there are also manufacturers happy to ramp up their capacity and therefore complement the existing capacity they have in their own supplier portfolio.”

Too many suppliers are content to continue at a pace that hinders the supply chain’s recovery. Vallejo recommends incentives to speed them up:

“It's very common in the industry to have delay penalties. I would rather have payment rewards for suppliers that were able to provide sustainable delivery on time.”

But as things stand, too many MROs are being priced out of the market, according to Jasper van den Boogaard, VP Airframe Acquisition & Trading at APOC Aviation:

“The manufacturers aren’t getting new aircraft into the market and it's difficult for part-out companies to buy aircraft at the moment because the prices are really up.”

Isolationists aren't helping the industry

More partnerships linking every tier of the supply chain are critical to continuing its revival in 2024, concurs Paul Lochab, the CCO of Satair:

“They can’t be a one-way street. It's going to take both and all of us to work together to drive this momentum in a positive direction. If we all work in isolation, it's not going to help the industry.”

David Stewart, Partner at Oliver Wyman, agrees that disruption to the supply chain is the biggest problem heading into next year:

“Wherever you are, whatever region you're in, there's a shortage of skilled labour to do the maintenance on the planes.”

Lochab, meanwhile, highlighted the tendency of certain operators to not share data, urging better communication across the chain:

“The information flow is critical: so we can help each other, and we can plan. It keeps the focus on driving this together, rather than ‘Here's my demand’. So when I talk about partnerships, it's also about having transparent  communication and sharing data.”

How technology can help reboot the supply chain

Stewart would like to see the industry take a more innovation-based approach to solving the supply chain disruption:

“Whether that means better machine learning on-demand, parts forecasting, better supply chain management, and using technology to address those turn-times."

Bjarke Ruse Sejersen, CEO and Founder at AI-powered B2B commerce facilitator Go Autonomous, thinks it’s time for a complete overhaul to restore stability to the supply chain:

“Technology has developed so much in recent years – especially tech powered by AI – so it could be time for us to rethink our core processes.”

With the right approach to technology, particularly from a digital perspective, the supply chain could be set back on an even keel, believes Lochab: 

“The timeline, I would say, for the supply chain to get better would be first quarter 2025. I think a lot can be done between now and that time period to take it to the next level.”