Delivery problems are causing difficulties for airlines

Frankfurt It was heavy fare for engine manufacturer Pratt & Whitney, which Indian low-cost airline Go First recently announced. Because the US group is currently not providing enough engines and spare parts that are ready for use, you have to apply for bankruptcy protection.

Around half of the 49 short- and medium-haul Airbus A320neo jets are unusable and economical flight operations are no longer possible, it said. The airline has now sued Pratt & Whitney for damages of around one billion dollars in a court in Singapore.

It is difficult to judge how reliable the allegations made by the Indian low-cost provider are. Pratt & Whitney said in a statement that Go First has long defaulted on maintenance and lease payment obligations. “The supply chain is always a grateful culprit, precisely because it is so complex,” says Michael Santo from the management consultancy H&Z.

But the fact is: The delivery problems with components or even complete aircraft are causing difficulties for airline managers worldwide. At Lufthansa, several A320 aircraft were recently grounded because of non-operational engines. At the sister company Swiss, it was even a third of the A220 fleet that uses the same engines.

A replacement device must be obtained urgently. Anyone who books Swiss suddenly finds themselves on a plane that has been rented by another airline. This does not go down well with many passengers.

First airlines cannibalize new jets

The shortage on the engine side is also affecting Air Baltic. At the beginning of the year, the Dutch company KLM had to park more than half of its Embraer E2 jets. This model also flies with the affected Pratt & Whitney engines.

In their distress, the first airlines are taking unusual measures. Air New Zealand recently removed the engines from two new jets for installation on other aircraft that are urgently needed on particularly lucrative routes.

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The economy of shortages is increasingly delaying the delivery of new aircraft. On average, every A320 is between 100 and 150 days late, said Lufthansa boss Carsten Spohr a few days ago at a staff meeting in Munich.

This is causing growing frustration in Toulouse at Airbus. The European aircraft manufacturer was able to deliver 127 machines in the first three months of the year, compared to 140 in the first quarter of 2022. There are delivery bottlenecks, for example with fuselages or with cabin equipment such as seats. But the engines are the biggest concern. “We are seeing more problems with the engines than ever before,” said CEO Guillaume Faury recently.

It doesn’t look any better for rival Boeing, which has been struggling with quality problems for years. The group is allowed to deliver the A320 competitor 737 Max again. Aviation authorities around the world had banned this for almost two years because two jets had crashed due to software programming that was too aggressive.

But now there are problems with the production of the hulls. Supplier Spirit must first eliminate manufacturing defects. That will affect deliveries until the end of July, the company announced earlier this month.

One reason for the massive problems: the manufacturers often buy from a supplier. “There is a lot of talk about resilience,” says industry expert Santo: “However, the supply chain in aviation is not resilient. There is often only one supplier for certain parts.”

He doesn’t expect a quick recovery. The complexity will increase because Airbus has to expand the supply chain locally to expand production in China. “But that also makes them more vulnerable,” says Santo.

Another reason is the lack of employees. The shortage of staff is still a big issue, reports Santo: “It is made more difficult by the fact that Airbus sometimes recruits staff from its own suppliers. That doesn’t help stabilize the supply chain.”

Airlines postponed maintenance during the pandemic

But Santo also sees failures on the part of the airlines themselves. The bottleneck in the engines was foreseeable. “Because little was flown during the pandemic, the airlines pushed maintenance into the future,” says the expert: “It was clear that the restart would lead to bottlenecks in the necessary maintenance.”

In a survey conducted by H&Z together with Aerovation Management Consulting in July 2021, 79 percent of managers from the industry named aircraft inspection and maintenance as the greatest challenge. However, many did not take countermeasures.

Assembly of an A320 at Airbus in Finkenwerder

Because parts are missing, Airbus cannot deliver as many jets as hoped.

(Photo: dpa)

Pratt & Whitney does have a larger inventory of spare engines. The US group usually has almost 300 ready to help airlines at short notice. But most of them have long since been confirmed customers to plug the biggest holes.

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In view of the problems, it is surprising that there are currently hardly any complaints from suppliers. During the pandemic, they had urgently warned of impending bottlenecks. Advisor Santo has a statement: “Airbus communicated in February that the rates are increasing more slowly than originally planned.”

The group actually wanted to build 65 aircraft of the A320 family per month soon. Now this value should not be reached until the end of 2024. The target of 75 jets has been pushed back by one year to 2026.

According to consultant Santo, however, this will only help to a limited extent to stabilize the supply chain. “Large suppliers are increasingly having a problem because Airbus hardly ever builds wide-bodied jets.” The long-haul aircraft are important for the mixed calculation. “While Airbus makes good money with short- and medium-haul aircraft, the components for the wide-body jets have the highest margins among suppliers.”

The consequences for suppliers: they would have to relocate some of their production to low-wage countries. “Many shy away from these investments,” says Santo. “But those who cannot further reduce their costs will have a hard time surviving.”

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