AAR: ‘Green Time’ Usage Still Slowing Engine Overhauls

AAR engine overhaul
Credit: AAR Corp.

A mismatch between available pilots and demand for lift is prolonging the window during which some airlines can use available engines on parked aircraft to delay overhauls, AAR’s top executive says.

“The green time [usage window] is lasting longer than we would have anticipated,” AAR President and CEO John M. Holmes told analysts on a recent earnings call. “And the pilot shortage is definitely contributing to that in as much as you’ve got a number of aircraft that are on the ground because airlines don’t have pilots.”

Holmes said one of AAR’s “large customers” has 50 aircraft on the ground as a result of pilot shortages. “Well, that’s 100 engines that they now have access to, to swap around and burn off green time,” he said. “So that’s definitely persisting longer than we would have imagined.”

When the downturn hit, many airlines turned to swapping engines and other major components from unneeded, parked aircraft to the in-service fleet as a way of conserving near-term cash. In regions where demand has bounced back, such as North America, the green-time usage window was expected to close quickly while lingering in places where demand has not come back as forcefully. But labor challenges—particularly with having enough pilots both on staff and qualified to fly the right aircraft—is creating new bottlenecks. 

Green-time engines can come from several sources, including parked aircraft, or ones that are idled but not yet in long-term storage. Aviation Week Network’s Fleet Discovery shows 2,311 commercial aircraft classified as parked, meaning they are idled but not in long-term storage. North American operators have parked 588, or 25%, of the total fleet. Among the four largest U.S. carriers, United Airlines has the most parked aircraft, at 62.

Holmes did not identify any customers or regions contributing to the delayed engine-overhaul trend AAR is seeing. Most of the company’s heavy maintenance work is for North American customers. 

“Engine overhauls are being delayed—that we would have anticipated by now—because aircraft are on the ground,” Holmes said, adding a lack of pilots is just one of several reasons. “That’s pushing that inflection point out.”

The green-time usage trend is delaying some engine part-outs, which is a headwind for the used materials market.

“We continue to see broadening interest in used material, but the immediate demand for used parts continues to be impacted by the utilization of green time as well as the lack of material availability for certain high-demand assets,” Holmes said. One silver lining to having a tight used-parts market: “Our new parts distribution activities continue to deliver meaningful growth,” he said. 

Sean Broderick

Senior Air Transport & Safety Editor Sean Broderick covers aviation safety, MRO, and the airline business from Aviation Week Network's Washington, D.C. office.