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.
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.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The biog
Age: 30
Position: Senior lab superintendent at Emirates Global Aluminium
Education: Bachelor of science in chemical engineering, post graduate degree in light metal reduction technology
Favourite part of job: The challenge, because it is challenging
Favourite quote: “Be the change you wish to see in the world,” Gandi
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
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SPECS
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Fuel consumption, combined: 7.7L / 100km
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