How Aviation Supply Chain Challenges Are Impacting The Industry

By Jason Zilberbrand

July 7, 2021 Educational

If you’re having trouble purchasing an aircraft or getting your aircraft in for regular maintenance, know you’re not alone. There are several factors that are affecting the aviation industry at the moment. However, there is a large emphasis on aviation supply chain challenges causing some trouble for aircraft owners everywhere.

In other words, if you haven’t stocked up on parts for your aircraft now, you could be waiting for a while to get the maintenance you need. Unfortunately, there is no flawless solution to this problem. But you can take some steps to help your future self.

Read on for some of the most disruptive supply chain challenges. Also, see what you can do to avoid potential problems.

Top 3 Aviation Supply Chain Challenges Affecting The Industry

We’ve seen a global slowdown in supply chain production and deliverables within the aviation industry. Here are some of the reasons why those slowdowns will continue to occur.

1. Shortage Of Raw Materials, Parts, And Labor

As production and aviation use picks up, manufacturers are having a hard time keeping up. When people are ready to get back to “normal” at the same rate as pre-pandemic levels, problems arise. In this case, there is a wide shortage of raw materials and parts being manufactured.

An article by Reuters says, “Manufacturing, which accounts for 11.9% of the U.S. economy, is experiencing shortages of labor and raw materials, impacting production at some industries.”

On the manufacturing side, costs have increased, meaning it costs the manufacturers more to have products made. In addition to shifts in pricing, labor is experiencing a shortage as well.

One popular tech-related part that is making waves due to shortage includes semiconductors, which we use daily in just about every piece of machinery. While this shortage mostly applies to the automotive industry, the Harvard Business Review says, “This means the automotive industry now must face the competing demands of all other industries, including those in electronics and those adding internet connectivity to their products.”

To sum it all up, there are not enough supplies and workers to go around to produce parts and materials for the aviation industry. This means more competition for regular maintenance and parts, as well as increased timing to get what’s needed.

2. Lack Of Space And No Production Of New Aircraft

OEM manufacturing facilities are always short on space, and due to the pandemic, many of those facilities either sat idle or at a highly reduced capacity. Spooling up production is much more complicated than reducing it. Getting skilled laborers back to work as well as lack of parts are creating a jam like no other. Keep in mind, backlogs were already at 2 years for most of the OEM's, and now most new aircraft deliveries have been pushed back.

3. Demand For Pre-Owned Aircraft Soars

The number one reason why you are witnessing a supply chain block is because of the increased demand for in-service aircraft and the feeding frenzy in many segments to purchase one. Just like the new aircraft coming off the line, used aircraft require substantial parts support, and without that inventory, many owners are facing AOG situations.

What You Can Do To Work Around These Aviation Supply Chain Challenges

Some of the above aviation supply chain challenges are completely out of your hands. However, there are some things you can do to help yourself and your aircraft when you need replacement parts and other pieces of equipment.

Account For Prolonged Shipping Times

Account for prolonged shipping times and backlogged inventory. Understandably, delayed or prolonged shipping times can be frustrating. In the past, you may have been able to get items in as little as a few days. However, the pandemic has caused a lot of strain on the supply chain market. The best steps you can take are planning ahead, placing orders, and preparing for items you won’t be able to receive readily. Keep in mind any over-border shipment will take twice as long, and that means more advanced planning, and please, please, please insure your shipment against loss.

Make Budget Adjustments

Ensure you are considering higher price points for regularly used parts like spark plugs. Because items like these are in high demand, you could be facing a 20%-30% hike in cost. Keep an eye on your inventory and order what you’ll need while you can.

If you’re a smaller aircraft business, such as a flight school, consider taking a look at your budget. Because of the pandemic, small aircraft businesses and flight schools have been and still are struggling. Flesh out where you have room in your budget to plan ahead and order parts you know you’ll need.

In all scenarios, you will be attempting to beat the race of shipping along with everyone else. This is why ordering ahead as much as possible is critical to planning ahead to combat any aviation supply chain challenges.

Schedule Regular Maintenance Far In Advance

While you can’t always anticipate the unexpected, you can expect your regular maintenance. Schedule that now – even if it’s in 2022. Get ahead of the common parts everyone will be looking for, and make sure you get it in writing that the shop you are using has all of the parts in stock before you hand over your aircraft.

Aviation Supply Chain Challenges Aren’t Stopping Aircraft Sales

For those who are ready and working on the purchase of an aircraft, congratulations! With over 27 years of aircraft and engine valuation services under our belt, we continue to serve the market as needed.

We stand by the idea that you shouldn’t move forward with an aircraft sale without first getting the Carfax® for aircraft with a Verified Aircraft Value Report. While you may be tempted to speed up the buying process for yourself to secure your aircraft, you don’t want to make the mistake of purchasing without looking at essential data regarding an aircraft’s history and who owns it.

Contact us today or shop at the VREF store to get started.