The Looming Price Tag of Maintaining Aging Aircraft Engines

Release date: 2024 February 22

Despite a very strong rebound in recent months, the commercial aviation industry faces a hidden storm brewing within its aging fleet. With the current supply of both aircraft, their parts, and especially engines being way behind the still rapidly increasing demand, the cost of maintaining older engines is skyrocketing.

This escalating challenge, far from confined to hangars and maintenance manuals, threatens to wave through ticket prices, airline profitability, and ultimately, the very accessibility of air travel itself. Understanding the involved forces driving this cost increase and its potential consequences is crucial and it all begins with a dwindling supply of parts for older engines.

The Challenge of Parts Availability

As manufacturers prioritize production of newer, more fuel-efficient models, the availability of components for their older counterparts’ declines. This isn’t simply a matter of convenience as stringent safety regulations often mandate the use of certified parts, further restricting options and pushing prices upwards.

A 2023 report by Airbus highlights this concern, stating that by 2035, the demand for spare parts for older A320 family aircraft could outstrip supply by as much as 40%. This limited supply creates a feeding frenzy, with airlines and maintenance providers locked in a bidding war for increasingly scarce components, which is a remarkably pressing concern when it comes to the issue of parts for older aircraft engines.

A recent study by Oliver Wyman revealed that prices for parts for engines like the CFM56, a workhorse of the industry powering Boeing 737s and Airbus A320s, have risen by a staggering 30% in the past five years. Yes, a solid hike of almost one-third of a price in half of a decade. Enough to make a grown man weep into his engine maintenance manual.

Consider, for example, the current price tag attached to a single CFM56-5B/7B hot section blade – a critical engine component – to understand the severity of the issue. Clocking in at over $1.7 million for a complete set, these blades, along with numerous others, are becoming increasingly difficult and expensive to source.

But the rising cost isn’t merely a matter of parts – it’s about people too. The sophisticated mechanisms of older engines require a specialized skillset that’s becoming increasingly rare. As experienced technicians retire and the industry focuses on newer technologies, there’s a growing gap in expertise.

Tough Choices: Balancing Maintenance Costs and Fleet Retirements

This scarcity drives up labor costs, adding another layer to the already inflated maintenance bill. A 2022 report by Aviation Week Network estimates that the demand for qualified technicians specifically for older engines will outpace supply by 18% within the next decade. And this talent gap isn’t just a theoretical concern, which could or could not manifest itself if the forecasts we have now are precise enough. Airlines are already reporting difficulties finding technicians with the necessary experience to maintain their aging fleets.

The consequences of these rising costs are far-reaching. Airlines, caught between mounting maintenance bills and competitive pressure, face difficult choices. One option is to pass the cost on to passengers through higher ticket prices. A 2023 study by IATA (International Air Transport Association) predicts that rising maintenance costs could contribute to at least 2% increase in global airfares by 2025. This translates to hundreds, potentially thousands, of dollars added to long-haul flights, potentially putting air travel out of reach for budget-conscious travelers. So, ticket prices climb ever higher every day, a cruel tax on the dream of flight. And for those left behind, stranded on the ground as the world rushes by, the future looks dim indeed.

Another option is to retire older fleets prematurely. This may seem like a clean-cut solution, but it comes at a hefty price tag. Replacing an entire fleet is a multi-billion-dollar investment, and airlines often struggle to recoup these costs quickly. Additionally, prematurely retiring operational aircraft creates a strain on global air travel capacity, potentially leading to reduced flight options and longer wait times.

Furthermore, it appears that neither most of aircraft nor any major engine fleet will be able to retire early due to the severe shortage that the market is currently experiencing. In fact, operators are delaying planned retirements in an effort to salvage as much value as they can from the commercial aircraft and even older powertrains that are still in service.

This delay in retiring aircraft and engines is also driven by the high demand for air travel, which is expected to rebound strongly once the pandemic subsides. As a result, airlines are trying to maximize their operational capacity and meet the growing passenger demand by keeping their existing fleets in service for longer periods. This strategy allows them to avoid potential disruptions in flight schedules and ensure a smoother transition when introducing new aircraft into their fleets.

Addressing Concerns Amidst Scandals and Lingering Uncertainty

Seeking alternative solutions can be tempting, but it’s also fraught with risks. Utilizing used parts can be cost-effective but raises concerns about safety and reliability. Third-party suppliers, or even maintenance providers may offer lower prices, but their quality standards might not be up to par. And while it is rarely an issue regarding the latter, last year’s developments with so-called AOG Technics’ fake parts scandal, where a significant number of used parts with forged documentation made its way to dozens of still operating CFM56 engines, sparked concerns about tracing the origin of parts, involved in engine maintenance worldwide. The full scope of the scandal is still being investigated, with concerns about unidentified or unremoved parts in operation.

The incident caused airworthiness concerns, groundings, inspections, and raised questions about supply chain integrity in the aviation industry. Ultimately, airlines are caught in a delicate balancing act, trying to maintain affordability and safety while navigating a market with limited options and rising costs.

The impact isn’t confined to airlines alone. Maintenance providers, while benefiting from higher prices, face their own set of challenges. Sourcing parts in a competitive market requires strong relationships with manufacturers and distributors. Finding and retaining skilled technicians becomes crucial, demanding investments in training and competitive compensation packages. This tightrope walk between profitability and expertise presents a unique set of challenges for this vital cog in the aviation industry.

With a limited supply of parts and technicians, airlines are forced to compete for their services, driving up prices and lead times. This creates a vicious cycle where rising costs lead to deferred maintenance, which further exacerbates the problem down the line.

Another challenge, arising from the looming demand of these days and the upcoming summer season in the Norther Hemisphere is related to ongoing maintenance delays. When shops are overloaded, even routine maintenance tasks can get backlogged, leading to potential safety risks and increased downtime for aircraft. This can further disrupt airline schedules and negatively impact passenger experience.

Working Together to Tackle Rising Costs

Yet, among all the challenges, the optimism is still here. As it is quite frequently mentioned these times, airlines, manufacturers, and maintenance providers can work together to improve parts availability, optimize maintenance procedures, and share best practices. For example, advanced repair techniques can offer cost-effective solutions without compromising any of current safety standards. Airlines, as well as other airplane operators and such airplane owners as leasing companies or ACMI providers can proactively plan for engine retirements, potentially negotiating bulk purchase discounts for replacement parts. By taking advantage of an effective oversight and careful planning, the industry can mitigate the impact of rising costs and ensure a smooth flight path for the future.

All in all, it is clear that the rising cost of maintaining older aircraft engines isn’t just a technical hurdle, but also more complex challenge with far-reaching implications for the entire aviation ecosystem. Recognizing the underlying factors and encouraging cooperation among the businesses and other industry-related entities are key to ensuring that the dream of taking to the skies remains accessible to all. After all, every one of us is sure that our common goal is to be sure air travel would remain bright, affordable, and safe.



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