Two aviation leaders have predicted that supply chain problems in the industry will persist through 2025.
Andy Cronin, chief executive of leasing giant Avolon, told Reuters that while aircraft production issues were being ironed out, supply chain problems would continue to challenge efforts to ramp up output over the next two years.
He added that lease rates would continue to rise as a result. Avolon itself saw its net profit almost double in the first quarter of 2024, rising to $107 million.
It ended the quarter with an owned and managed fleet of 577 aircraft, with total orders and commitments for 456 new technology aircraft.
Meanwhile, one of the industry's key OEMs, GE Aerospace, had a similar view. Its head of commercial engines and services, Russell Stokes, told Reuters that “it's still a challenged environment for this year and probably next year.”
Stokes said the company’s parts and services businesses still faced material supply bottlenecks.
Neither Cronin nor Stokes were minded to forecast much further ahead in their interviews, but an audience poll at Aviation Week Network's Engine Leasing Trading and Finance Europe conference in London earlier this month was even more pessimistic, with more people predicting that the current supply-demand imbalance would continue for 3-4 years rather than 1-2 years.
Conference panelist Jaime Nieto, chief commercial officer for Rolls-Royce & Partners Finance, agreed, predicting that strong demand for spare engines would continue for 3-4 years due to new aircraft production challenges at the OEMs and ongoing supply chain disruption. “You can’t flip a switch and fix the supply chain,” he said.
