Airlines Struggle to Find Engines as Travel Comes Roaring Back - BLOOMBERG
(Bloomberg) -- This year was supposed to herald air travel’s big comeback, with China reopening, airlines ramping up flight schedules and airports going on a hiring spree to handle the surge.
But a potential bottleneck to that growth is looming in form of a shortage of aircraft engines and spare parts, particularly on workhorse Airbus SE and Boeing Co. jets. The shortfall is being exacerbated by the fact that more carriers are flying with the latest-generation turbines that — while as much as 20% more fuel efficient — also have been prone to far more frequent maintenance cycles than their more robust predecessors.
As a result, airlines around the world have been forced to ground hundreds of airplanes just as they gear up for what stands to be a busy summer travel season. Air Baltic Corp AS says 10 of its 39 Airbus A220s are currently out of service due to engine issues. In the US, budget carrier Spirit Airlines Inc. warned it would scale back growth plans due in part to a spate of malfunctioning engines. And India’s IndiGo is seeking compensation for about 30 planes it has had to ground due to parts shortages, some of which are tied to engines.
Supply-chain constraints were rippling through the industry even before the pandemic, and in its aftermath engine makers have struggled with a lack of skilled mechanics and component shortages.
The latest engines from Raytheon Technologies Corp. and a General Electric Co.-Safran SA venture feature exotic metal alloys, coatings and composites needed for them to operate at furnace-like temperatures. Airlines say turbine components are wearing more quickly and being sent to the shop earlier than initially expected.
“The engines are running hotter, and the materials used for that are not withstanding the pressure, so there are more engine-related problems than we used face previously,” said Qatar Airways Chief Executive Officer Akbar Al Baker.
Turnaround times for engine repairs have tripled as waits for certain parts drag on for more than a year in some instances. Supplies of engine components are further stretched as Airbus and Boeing clamor for higher output of new engines as they strive to pump out their best-selling single-aisle aircraft models in record numbers.
“Right now that’s hotter than hell,” Cliff Collier, a Texas-based aviation consultant, said of the engine sector. “There are parts shortages left and right and it’s impacting MROs badly,” he said referring to maintenance and repair organizations.
The growing pressure on jet-engine makers will be in the spotlight Thursday when GE’s chief executive officer, Larry Culp, lays out the company’s future for investors as a standalone aerospace manufacturer. Its executives also will be pressed about the durability of the Leap turbine made by the GE-Safran venture, called CFM International, for Airbus’s A320neo aircraft family and Boeing’s 737 Max.
Airlines complain of even poorer reliability for a rival engine manufactured by Raytheon’s Pratt & Whitney division.
Closing the Gap
Pratt’s latest turbofan models are flying an average of about 10,000 hours before they need to be removed for overhauls. That’s only about half the so-called time-on-wing of its predecessor engine, despite multiple fixes and upgrades to boost longevity, Raytheon CEO, Greg Hayes, said at a Barclays conference last month. Closing that gap will be a challenge over the next five years, he said.
CFM said in a statement that its Leap engine’s time-on-wing is “comparable” to that of its predecessor, the CFM56, at the same point in its service life, about six years after its first commercial flight. Engines being sent to repair shops are going in order to address specific issues that can be completed faster than more substantial overhauls, it said.
“We have made significant progress in increasing Leap time-on-wing, and we remain committed to continuing to work with customers to pro-actively plan shop visits,” a CFM spokesperson said.
Around 370 Airbus A320neos and A220s, along with 737 Boeing Max jets, are currently classified as stored, according to data from Cirium. The aviation data and analytics company defines such aircraft as those that are idled for 30 days or more for any of a variety of reasons.
Airbus said it’s closely monitoring the performance of engines on its aircraft. Boeing had no immediate comment.
Many airlines keep a cache of spares on hand, but there simply aren’t enough replacement engines available to keep pace with repairs. Carriers may be forced to keep older craft longer than anticipated and fly each plane more hours per day. In a pinch, they might even bring planes out of their pilot training fleets and put them into regular flight service. The shortage could crimp industry plans to expand the number of flights offered in 2024 and beyond.
Production Target Risk
Airbus and Boeing are counting on rising output of turbines to keep their A320 and Max assembly lines humming. The glut of engine repairs looks likely to extend into next year or even 2025, raising the risk of too few power plants to meet planemaker production targets, said Paul Dolan, CEO of Aviation Technical Services, a large US maintenance provider.
Introduced a little over a decade ago, the new engine options for the A320 family and the 737 helped spur an unprecedented surge in demand. Fuel is often among the single largest expenses for airlines, so any reduction in consumption instantly feeds through the bottom line.
Pratt’s powerplant, which is used on models including Airbus SE’s best-selling A320neo family and the smaller A220, as well as Embraer SA’s E2 regional jet, struggled with teething pains after it was introduced, with multiple carriers reporting inflight shutdowns. Pratt subsequently said it had resolved the issues, but some carriers say they continue to struggle.
The Pratt engine “has experienced diminished service availability, an issue that has been steadily increasing” since mid-2022, Spirit CEO Ted Christie said on an earnings call Feb. 7. “This is not just a Spirit issue.”
Some A320neos have had engines removed after just 2,000 to 3,000 hours in operation, while A220s have had engines come off after only 1,000 hours, according to Doug Harned, an aerospace analyst with Bernstein.
Harned calculated that 18% of A220s and 13% of A320neos powered by these engines were out of service as of early March. CFM’s Leap has performed better, although 4% of A320s and 5% of Max jets are grounded — much to the consternation of customers, he wrote in a March 2 report.
A Raytheon spokesperson disputed those estimates for the Pratt-powered planes, saying less than 10% of those jets are parked. The company declined to comment further on the issue.
Frequent Shop Visits
The GE-Safran Leap model also has faced issues. A build-up of carbon around the fuel nozzle has resulted in inspections after 1,000 hours of flight, Harned said. The engine’s high-pressure turbine shroud has been redesigned over the last few years “but is still leading to a degradation in engine performance” and consequently more frequent shop visits, he said.
CFM said it introduced a new configuration of the high-pressure turbine shroud that went into production in 2019 and is retrofitting the remainder of the Leap engine fleet with the change.
Once engines are opened up for repairs, airlines face another costly hassle: Long waits for spare parts. Collier, the aviation consultant, said he’s seen lead times for forged parts stretch out a year or more.
“What we’re seeing is basically a queue building up due to insufficient maintenance capacity,” said Andy Cronin, the chief executive officer of Avolon Holdings, a major aircraft lessor. “It was simply never intended that the engines would need this much maintenance at this stage in the program.”
The situation underscores how supply chain woes continue to weigh on aerospace manufacturers. Airbus last year cut its target of delivering 700 planes as a result of these issues. But it failed to meet even that reduced goal.
GE’s engine venture has had to pare back its own production goals. CFM International still aims to boost Leap deliveries this year by 50% to about 1,700 engines, but that’s down from an earlier target of 2,000.