Daily Memo: Seeking Control To Offset Engine Supply Chain Struggles

MTU Maintenance Serbia is one of the German engine specialist’s newest facilities. 

Opened in late 2022, its focus is parts repair—and it’s ramping up fast. The shop is adding capability at the rate of about one new part repair per day, MTU’s U.S. VP of Marketing and Sales Les Cronin said at the recent Aviation Week AeroEngines Americas conference.

The venture is an example of what companies of all sizes are doing to help gain some control over their supply chains. In MTU’s case, Serbia is helping the company to bring some out-sourced work in-house and lessen its reliance on vendors struggling to keep up with demand.

Engine supply chain pain was, unsurprisingly, the dominant theme at the AeroEngines event, held Feb. 7-9 in Dallas. While progress is evident, the gap between supply and demand—whether it’s new-engine deliveries, spare parts, or repairs—isn’t going away anytime soon.

“Supply is growing at a very rapid rate, but demand is out-pacing it,” GE Aerospace Materials general manager Horatio Repetto said. “We’re going to have to work closely together in the next year or two plus to be well-coordinated on how we meet that demand.”

Engine original equipment manufacturers (OEMs) are particularly strained. On one side, they have been struggling to meet recent monthly production-rate targets at both Airbus and Boeing, and those rates are only going up. 

Meanwhile, operators working to meet demand for lift need to keep their in-service fleet flying—in many cases, aircraft and engines are being kept in service longer than expected to compensate for delivery delays. The result: surging demand for engine parts and repairs.

Engine OEMs are boosting maintenance capacity. GE Aerospace added 1,300 people across its network of overhaul shops in 2022 and is gearing up for a 20% increase in engine shop visits in 2023, Repetto said. But the enginemakers can’t control demand.

“It’s not about when the supply chain gets healthy,” he said. “It’s about when it catches up to demand.”

Like MTU’s Serbia example, American Airlines took a different approach to one of its demand challenges by boosting internal capability. The carrier used the pandemic’s low activity period to improve its Tulsa, Oklahoma, engine overhaul facility. One result: a near-halving of in-average overhaul turnaround times for workhorse CFM56-5B and -7B engines to about 50 days. 

A more efficient shop means more capacity. After completing 30 heavy overhauls in 2019, the shop performed more than 100 in 2022, VP of technical services Mark Miner said. This year’s figure will be closer to 120.

Smaller companies are taking similar steps. Used serviceable materials specialist Setna iO got a jump on the current used-parts demand trend by purchasing airframes and engines more than a year ago, said company head of commercial Hunter Edens.

It soon found, however, that capacity for doing work needed to get usable components to market, such as engine teardowns and parts repairs, was strained. So, it invested in its own auxiliary power unit repair facility to help bring the in-demand components to market faster.

Its next step: developing its own engine disassembly capability, which will get parts to end users—and money into its bank account—even faster.

“The objective that we’re pursuing is trying to control as much of the front-end supply chain as possible,” Edens said.