Aircraft manufacturers are stepping up to deliver more aircraft as demand continues to increase. Embraer plans to deliver up to 18% more aircraft this year alone and just made a $7 billion deal with Flexjet to deliver 182 aircraft. 

With contracts and orders signed, and money exchanged, the real question is how will aircraft companies navigate global supply chain shifts in aviation? Dive into recent findings to see how these shifts are reshaping the private aircraft market.

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Global Supply Chain Shifts On Single-Engine Aircraft Production & Distribution

The global supply chain is the backbone of aircraft production. However, significant shifts in material volatility, manufacturing relocation, and logistical bottlenecks directly impact production costs and timelines. From a valuation perspective, these factors are critical to be aware of. 

1. Materials Sourcing & Availability

In 2023, the U.S. general aviation sector delivered 2,104 aircraft – a 7.7% increase from 2022 with single-engine piston aircraft deliveries rising by 10.7%. This is great for buyers and sellers who are on the hunt for a good deal. However, just about every aspect that goes into aircraft production requires essential resources from around the world. 

Among the top resources aircraft manufacturers use include:

  • Aluminum alloys
  • Carbon fiber and fiberglass composites
  • Titanium
  • Liquid crystal
  • ITO glass
  • Polarizers and magnet-based components
  • High-performance lubricants 
  • Jet-A or Aviation gasoline (Avgas fuel)
  • Aerodynamic coatings and paints
  • Metals and materials for fasteners and structural adhesives

The aerospace materials market is expected to grow at a compound annual growth rate (CAGR) of 8.49% from $46.24 billion – reaching $96.22 billion by 2032. With no signs of slowing anytime soon, it’s also important to highlight the fact that acquiring these materials isn’t a simple process. And demand shifts, inflation, and energy costs all contribute to their value. This is another reason why private aircraft owners should routinely analyze aircraft trends for further development and planning.

This increase alone will leave aircraft manufacturers crunching numbers to better understand and predict material sourcing and availability for future delivery.

2. Manufacturing and Production Relocation

Aircraft manufacturers are ramping up production to meet growing demand, but global supply chain delays continue to create setbacks. Airbus, for example, has had to push its initial goal of delivering 65 new aircraft a month by mid-2023. They now plan to deliver up to 75 aircraft a month by 2027.

Nevertheless, Airbus and other aircraft manufacturers must track and prepare for challenges such as skilled labor shortages and rising wages. One or any combination of the following has the potential to push manufacturers to explore alternative manufacturer locations with lower costs. 

Assembly isn’t the only roadblock either. Meeting and maintaining regulatory compliance, safety, environmental, and labor regulations across countries requires a variety of automation and advanced manufacturing methods.

Shifting production to innovative, emerging markets can cut costs but may introduce risks related to quality control and supply chain logistics. Manufacturers must balance cost efficiency with technological advancements and regulatory compliance to maintain quality and meet delivery expectations.

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3. Logistics and Distribution Challenges

Aircraft structures may not have changed much over the years, but the technology certainly has. Aircraft use more Computer Numerical Control (CNC) machining and 3D printing than before, ultimately changing future processes and operational procedures. The global aerospace 3D printing market is predicted to be valued at $9.2 billion in 2023 and is estimated to reach $17.2 billion by 2030, growing at a CAGR of 9.3%.

Ensuring the technology is assembled correctly, however, means regional distribution hubs become more valuable as they can offer faster and more cost-effective materials delivery.

Understandably, much of aviation’s newly developed aircraft technology is to generally enhance safety and awareness. However, there are other technologies in logistics solutions such as blockchain technology and AI-driven predictive analytics help streamline supply chains and reduce delays. 

Additionally, aviation experts are paying attention to global shipping disruptions for component delivery to analyze rising transportation costs and their impact on pricing. Increased costs in transportation and logistics leave aircraft manufacturers under pressure to find more efficient and sustainable solutions.

RELATED BLOG: How Does Sustainable Aviation Fuel Affect Private Plane Performance?

4. Economic and Geopolitical Factors

Discussions around sustainability in aviation naturally bring up geopolitical factors that heavily influence material availability, safety regulations, and beyond. Many are worried about escalating trade disputes between global regions and continually evolving import and export regulations – especially in key aviation markets.

To address these challenges, manufacturers must stay adaptive to avoid interruptions and additional costs. These decisions directly impact price fluctuations for production costs. 

Furthermore, a global push for sustainable aviation is forcing manufacturing companies to explore alternative materials and fuel options. Aviation is experiencing increasing regulatory pressures, particularly concerning environmental standards and safety protocols. Meeting and maintaining compliance in aviation is slow-moving and often requires a large investment in new technologies and processes to get to the next steps.

Where To Locate Precision-Driven Aircraft Appraisals

Global supply chain shifts in aviation underscore the need for an adaptive and resilient supply chain that can keep up with both external challenges and technological advances. 

Supply chain resilience is non-negotiable in aviation, and manufacturers need to be proactive – not reactive. This means diversifying sourcing, optimizing logistics, and leveraging technology. Tracking trends in aviation at every point is critical because they directly affect aircraft values. For those in the industry, staying informed is essential. 

VREF emphasizes the importance of accurate data and continuous education with ASA-Accredited Aircraft Appraisals to help you make informed buying and selling decisions.

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The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.