Airline industry's take-off threatened by supply chain chaos

Suppliers face lengthening lead times to source components that can now run six months to over a year, threatening manufacturers' plans to increase output

Aircraft at the Farnborough International Airshow in the UK, on Monday. To guarantee parts delivery, some suppliers are pushing plane manufacturers to order many months in advance. Bloomberg

The global air industry is in the midst of a post-pandemic rebound, but supply chain problems have left suppliers and manufacturers scrambling to source everything from raw materials to small electronic components to keep production moving.

From multinationals to family-run stockists, few have been spared the impact of shortages or delays. As a result, this week's Farnborough Airshow has been more about the factory floor than the usual shop window for new orders.

"We are keeping our head above water, keeping the flow happening, but the gymnastics required to make that happen are as difficult now as they have ever been," Stephen Timm, president of industry major Collins Aerospace, said.

At the other end of the spectrum, where suppliers lack the clout of a Collins or Honeywell, things are even more uncertain.

"At the moment it's extremely challenging because of the lack of raw materials," said Paul Wingfield, business development manager at Stokenchurch, England-based Aircraft Materials, which supplies alloys including aluminium, nickel, magnesium, titanium and nickel for the industry.

Not only are the mills that his company works with having trouble finding raw materials, but distributors are wary of holding on to inventory when there is a risk of recession.

"Nobody knows what the economy is going to do, so nobody's willing to invest in stock at the moment," Mr Wingfield said.

In conversations at this week's show, suppliers say material and parts delays have meant pushing manufacturers to order earlier, while manufacturers like Boeing have found themselves wading into the supply chain to keep parts flowing.

"We're going deeper into the supply chain than we've ever had to go to help our suppliers solve problems," said Cory Gionet, Boeing's vice president in charge of supply chains for commercial airplanes.

Earlier this year, Boeing said its 737 MAX aircraft production and deliveries were hit by shortages of a particular wiring connector.

Suppliers face lengthening lead times to source materials or components that can now run six months to over a year, threatening the manufacturers' plans to ramp up output.

To guarantee parts delivery, some suppliers are pushing manufacturers to order many months in advance, even if it means suppliers have to tie up capital by holding on to inventory for longer.

Visitors watch a RAF F-35 aircraft at the Farnborough International Airshow in Hampshire, southern England. Reuters

An Airbus SE A350 aircraft lands after an aerial display. Bloomberg

An Embraer C-390 Millennium military transport aircraft, used by Brazil's Airforce, on display. AFP

A detailed view of a Pratt & Whitney PW123 engine. Reuters

The RAF's Red Arrows aerobatics team perform. AP

Visitors shelter from the sun as they look around the show. AP

An Embraer E190-E2 aircraft. AFP

Visitors look at a model of the Wisk Aero autonomous aircraft. AP

A member of staff shelters from the sun. AP

Attendees walk past a poster of a Boom Supersonic concept Overture aircraft. AFP

A US Air Force F-35A fighter jet on display. Bloomberg

A model of proposed jet fighter aircraft Tempest, a joint programme by a consortium known as 'Team Tempest', which includes Britain's Ministry of Defence, BAE Systems, Rolls-Royce, Leonardo SPA, MBDA and Saab. AFP

Visitors watch the Embraer E2 Profit Hunter plane taking off. AFP

An Aksungur drone, manufactured by Turkish Aerospace Industries, on display. Bloomberg

An Airbus A350 plane flying over the crowds at Farnborough. AFP

Soldiers pose beside a Leonardo helicopter. AP

An aviation enthusiast shelters from the sun at the show. Temperatures were forecast to reach 40°C in parts of England. Bloomberg

A model of a Pratt & Whitney GTF engine. This is the first Farnborough in four years, due to the pandemic. Bloomberg

A Boeing 737-9 puts on a display at Farnborough. Bloomberg

Visitors examine water barrels in a Boeing 777X, in an experiment on weight distribution. AFP

An aviation fan uses a fan to keep cool amid soaring temperatures. Bloomberg

A worker keeps a GulfStream Aerospace Corp G650 business jet gleaming. Bloomberg

Britain's Prime Minister Boris Johnson tours Farnborough, a vital marketplace for the country's aviation industry. AP

Visitors board a Boeing 777X. Deals worth £161 billion ($192bn) were agreed the last time Farnborough was held, organisers said. AFP

Boris Johnson views the display by SaxaVord, the UK Spaceport. PA

More than 80,000 visitors from 96 countries are expected to attend this week's five-day event. Bloomberg

Switching their own suppliers can be almost impossible in a highly-regulated industry where components have to undergo rigorous approval processes.

"It's not a case of picking up and going to a different supplier, the validation process for doing that is actually often longer than the lead time," said Neil Lawrence, business development engineer at Woking, England-based Magnet Schultz.

It makes solenoids — electromagnetic valves — used in everything from plane hydraulics controls to air conditioning. Those valves range in price from a few hundred to tens of thousands of pounds.

Shortages of electronics components mean some will not be delivered for more than a year.

"We're getting terrible, terrible lead times on some parts," Mr Lawrence said.

Supply chain problems come at a time when the industry is eager to build ever more planes.

Airbus wants to raise A320 production rates to 75 single-aisle aircraft monthly over the next three years, from 50 now. But delays in engine supplies have held back aircraft deliveries.

Engine maker Pratt & Whitney, like Collins, a unit of Raytheon Technologies, said this week it aimed to get its engine deliveries for the A320 back on track by early 2023 as it battles labour shortages and supply chain snags.

"Certainly we're not happy about the position that we're in right now," Pratt & Whitney president Shane Eddy said.

Airbus chief executive Guillaume Faury said the show had brought slightly more comfort on engine delays.

But France's Dassault Aviation said it was "very concerned" about supply chains.