The Aviation Club UK forum met in our London office earlier this month to discuss “Supply chain resilience in the current crisis”. 

Key risk factors shaping the sector

The airline industry is accustomed to the economic cycle and geopolitical shocks. The current crisis, however, reflects a quick succession of unprecedented issues. The covid pandemic threw aviation into disarray: small and medium-sized enterprises within the supply chain were particularly affected, and many experienced staff, including hard-to-replace personnel in engineering disciplines, were laid off across the sector.  The recovery of this capacity has not kept pace with the renewed growth in the sector.

The Russian invasion of Ukraine in 2022 led to the grounding of a significant number of aircraft and caused disruption in the supply of both sheet metal and composites, of which Russia was a leading global supplier pre-sanctions.

The potential imposition of tariffs by the new United States administration may also cause issues. Attempts by industry players to insulate themselves from tariffs and retaliatory measures by removing the US from supply chains risks further constricting their options.

What is the impact on aviation?

The cumulative effect of this is a cross-industry order book of 17,000 aircraft (double the pre-pandemic level and which could take 14 years to clear at current rates), and 50,000 engines. An estimated 11 per cent of parts are over one month late, leading to commensurate delays with maintenance and fit-out.

An effect of these pressures is ageing fleets, which combine with arguably more fragile modern airframes and engines to further accentuate maintenance backlogs. Pressure remains intense for the industry to maintain the highest safety standards. 

The discussion

A lively discussion between the panel and audience included the exchange of a range of ideas for the future and efforts businesses were already making to mitigate the situation. These included:

• Greater collaboration between businesses to maximise capacity, for example taking advantage of differences in seasonality between northern and southern hemisphere.
• Generating ideas for the future, such as potentially easing regulatory pressures for the accreditation of products and people, while continuing to prioritise safety.
• Potentially leveraging artificial intelligence to facilitating the work of qualified and experienced engineers across language barriers. Regardless of the undoubted future role of AI, the consensus remained that investing in people and looking after SMEs was also crucial.

The forum could equally have taken in the many potential disputes issues which are implicit in this unprecedented crisis, with Original Equipment Manufacturers seeking to limit liability for what they state to be excusable delays. 

The forum was chaired by the Aviation Club’s Sarah Owen, in conversation with Fraser Currie (CEO of Joramco), Steven Greenway (CEO of Flyadeal) and Keith Woof (Head of Engineering, Purchasing and Logistics at Jet2).