• Thu. Aug 4th, 2022

Airline industry takeoff threatened by supply chain chaos

ByKimberly A. Brochu

Jul 22, 2022

The global airline industry is in the midst of a post-pandemic rebound, but supply chain issues have left suppliers and manufacturers scrambling to source everything from raw materials to small electronic components to to keep production moving.

From multinationals to family resellers, few have been spared from shortages or delays. As a result, this week’s Farnborough Airshow focused more on the factory than the usual showcase of new orders.

“We’re keeping our heads above water, keeping the flow going, but the gymnastics needed to get there are as tough as they’ve ever been,” said Stephen Timm, chairman of tech giant Collins Aerospace. industry.

At the other end of the spectrum, where suppliers don’t have the clout of a Collins or a Honeywell, things are even more uncertain.

“At the moment it’s extremely difficult due to the lack of raw materials,” said Paul Wingfield, business development manager at Aircraft Materials, based in Stokenchurch, England, which supplies alloys such as aluminium, nickel, magnesium, titanium and nickel for industry.

Not only are the factories his company works with struggling to find raw materials, but distributors are reluctant to hold onto inventory when there is a risk of a recession.

“Nobody knows what the economy is going to do, so nobody’s ready to invest in stocks right now,” Wingfield said.

In conversations at this week’s show, suppliers said delays in materials and parts were forcing manufacturers to order earlier, while manufacturers like Boeing found themselves wading through the supply chain to maintain the flow of parts.

“We’re going further down the supply chain than we’ve ever had to go to help our suppliers solve problems,” said Cory Gionet, Boeing vice president of aircraft supply chains. commercial.

Earlier this year, Boeing said its production and deliveries of 737 MAX aircraft had been hit by a shortage of a particular wiring connector.

Suppliers are facing delays in sourcing materials or components that can now last anywhere from six months to more than a year, threatening manufacturers’ plans to ramp up production.

To guarantee the delivery of parts, some suppliers encourage manufacturers to order several months in advance, even if it means tying up capital by keeping their stocks longer.

Switching suppliers can be nearly impossible in a highly regulated industry where components must go through rigorous approval processes.

“It’s not about picking and going to another vendor, the validation process to do that is actually often longer than the timeline,” said Neil Lawrence, business development engineer at Magnet Schultz, based in Woking, England.

It makes solenoids – electromagnetic valves – used in everything from aircraft hydraulic controls to air conditioning. The price of these valves ranges from a few hundred to tens of thousands of pounds.

Shortages of electronic components mean some won’t be delivered for more than a year.

“We have terrible, terrible delivery times on some parts,” Mr. Lawrence said.

The supply chain issues come at a time when the industry is eager to build more planes.

Airbus wants to increase A320 production rates to 75 single-aisle aircraft per month over the next three years, from 50 currently. But delays in engine supplies have dampened aircraft deliveries.

Engine maker Pratt & Whitney, like Collins, a unit of Raytheon Technologies, said this week it intended to get its engine deliveries for the A320 back on track in early 2023 as it battles labor shortages and supply chain issues.

“We are certainly not happy with the position we are in right now,” said Pratt & Whitney President Shane Eddy.

Airbus chief executive Guillaume Faury said the show brought a little more comfort on engine delays.

But France’s Dassault Aviation said it was “very concerned” about supply chains.

Updated: July 22, 2022, 03:30