Magnetic MRO has experienced significant price increases in recent years; for example, tire prices have risen by more than 20% within a single year, driven by the ongoing higher costs of raw materials and labor, according to Kaire Kalve, head of supply chain.
Kalve says the impact of rising inflation exacerbates the situation, leading to further price hikes. “The outlook for raw material prices in 2024 varies depending on the specific material,” Kalve tells Aviation Week Network.
Prices for key materials such as stainless steel have trended upward, aluminum prices remain highly volatile and scrap is projected to continue fluctuating, observes Kalve.
Heston Materials CEO Kestutis Volungevicius thinks serviceable, ready-to-go components have seen the most cost pressure. “We see that especially for all fast movers; such materials are hot items, and you cannot predict what the price will be tomorrow,” he says.
Industry lead times for components remain crucial, and despite some recent reassurances that things are easing, Volungevicius is convinced material cost pressures will continue for the long term—lasting for at least a few years instead of just a few months.
Repair stations have struggled with turnaround times (TAT), so MROs are deploying materials-related mitigation strategies. Material shortages—including both final products and essential raw materials such as aluminum and titanium—have complicated the production of spare parts and extended lead times. Increased lead times from manufacturers result in longer TATs for repair services overall.
“Repair station TATs are unpredictable; that’s the reality nowadays,” says Volungevicius. He notes that Heston’s strategy begins with choosing the right repair shop to provide component inspection, repair and overhaul.
Volungevicius sees no sign of a significant price decrease over the next few years, and he believes OEM price escalations compounding the issue.
Kalve says Magnetic MRO has adopted proactive strategies, such as working with long-term partners globally while exploring alternative sources and expedited repairs. “We are maintaining close communication with repair shops to evaluate the fastest repair options and staying up to date on material shortages,” she says.
Many of the material price escalations are more pronounced on certain parts. While it is difficult to pinpoint a single group of materials where prices have notably eased, Kalve believes continuous improvements in supply chain management have provided some relief.
She says the most noticeable price stability is in expendable items like fasteners, seals, screws and similar consumables, which have seen a relative easing in prices. “As a general rule, accurate demand forecasting, exclusive supplier contracts and strategic price fixing help to maintain cost control on these essential materials,” Kalve says.
