Podcast: What Were The Two Key Words At AeroEngines Americas?

Aviation Week editors Guy Norris, Sean Broderick, James Pozzi and Lee Ann Shay hash over the shifts and challenges in the North American aviation engine market. 

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Lee Ann Shay (00:48):
Welcome to the latest MRO Podcast, live from Tampa, home to this year's AeroEngines Americas and Engine Leasing, Trading & Finance Americas. I'm Lee Ann Shay, Aviation Week's Executive Editor for MRO and Business Aviation. Joining me are colleagues James Pozzi, our MRO Editor for the EMEA region; Sean Broderick, Senior Air Transport Editor; and Guy Norris, Senior Editor. Welcome, gentlemen.

Sean Broderick (01:14):
Good to be here. Thanks, Lee Ann. On sunny Tampa. Yeah.

Lee Ann Shay (01:18):
Absolutely. So we've spoken a lot about engine MRO issues, so I'm not going to go into all the details of what makes it so challenging, but year over year, it seems to me that there are quite a few nuances in the market. So let's just get right into it. Engine availability is the name of the game, and there's been a lot of talk here about ways to keep engines on wing and make sure they're available. What sticks out to you, Sean?

Sean Broderick (01:43):
Yeah, I think availability can be broken down even further. Beyond engine availability, it's part of overall slot availability, and availability seems to be the driving force behind whether engines are staying on wing or not. It's also driving, again, the most interesting part to me—a lot of innovation. We are seeing the old ways of handling an engine with 5,000 hours left. Maybe it was good to overhaul and send back out, or you could send it back out to burn off the last 5,000 hours. But if it had only 2,000 or 3,000 hours left, you didn’t bother because the effort wasn’t worth it—the juice wasn’t worth the squeeze, so to speak. But now, any available asset with some time on it seems worth the effort to get the airplane back flying because that airplane needs to fly, especially since one that was ordered five years ago hasn’t been delivered.

(02:35):
The interesting question to me is, at some point, this is going to change. At some point, demand for lift and deliveries will get to the point where the demand may moderate, if not fall. Short of a black swan event, it’ll moderate, and the delivery pace will pick back up, and production rates will increase. So I wonder how much of the innovation that we’re seeing—not so much burning off green time on low-time engines, but more about module swaps and adoption of more complicated PMA parts—will stick around once the market sort of modulates, if you will. That’s going to be one of the most interesting things, but I don’t think that’s going to happen for a while. Another takeaway from this show is that we’re going to be talking about a lot of similar things and new innovations this time next year, I think, at this show.

Lee Ann Shay (03:28):
But we’ve gotten beyond supply chain and workforce issues, and we’ve really gotten into some really cool things. I would argue that a lot of the things we’ve been talking about over the last two days—some of these innovations and collaborations—are going to stick. I don’t know, Guy, James, what do you think?

James Pozzi (03:44):
I think there are certainly more strategic partnerships happening now. I agree with what Sean said about the module swaps. I’ve heard a couple of MROs say they would favor module swaps and certain parts repairs over things like exchanges. They cited delays, for example, in getting those parts. So availability—yeah, availability. There we go. Availability is definitely a key word. Scarcity is another one I’ve heard a lot as well—scarcity of assets, scarcity of parts, scarcity of people, for example. But yeah, back to the partnerships as well. That’s important. I feel that people in the industry, in this part of the world—obviously North America—feel there has been a more regionalized and focused approach in terms of more local repair networks. That’s a demand airlines have made. They want to see more localized, in-region activity rather than sending, I don’t know, an engine halfway around the world.

(04:53):
For example, Delta Air Lines had Justin Bevington, who is Director of Tech Ops Strategy & Planning. He was on my panel at AeroEngines Americas on day one. Justin said some very interesting things about encouraging MROs to establish regional partnerships and a presence there. He likes long-term agreements. That seems to be very much the thing right now for operators—locking things down for a long time just to get that consistency, oversight, and at least some good idea of the costs over a long period of time. Offload agreements as well, he cited. But it’s all about the planning from the airline side. They’ve taken a more integrated approach to planning and working with their suppliers, but doing that in-region. It seems like that’s going to be a permanent shift. John McCurdy of AvAir Aerospace—of course, we know them as a parts MRO; they do a lot of different parts on an aircraft and repairs, but they also manufacture some parts as well.

(06:07):
He feels there’s going to be a permanent shift to this kind of nearshoring trend. He cited a few reasons—geopolitics is one. Obviously, last year, or just under a year ago in April 2025, we were talking a lot about tariffs and the impact on the MRO market there on pricing and exporting, and some of the uncertainty around that. That’s played a role, definitely, but also the need for proximity to the airline operators—the customers. He also mentioned that regionalized repairs are going to become a more permanent thing, in his opinion. So yeah, very interesting step change and shift. We’ve been hearing about this kind of trend for several years, certainly since even before the pandemic. In some areas of the market where I’m based—obviously London, in Europe—they were talking about nearshoring base maintenance, for example, back in 2019, long before this pandemic world. But it’s seeped through to North America, and in the context of engines, that certainly seems to be what operators desire strategically.

Lee Ann Shay (07:08):
Thank you, James. Second question: CFM CEO Chris DTD delivered a pretty captivating keynote this morning. Guy, what were some things that stuck out from it?

Guy Norris (07:19):
Yeah, thanks, Lee Ann. Well, first of all, I’ve got to say I’m not an MRO expert like you guys. I was parachuted in here. I was moderating a panel, so I was listening with rapt attention to Chris’s keynote because it’s all news to me, sort of thing. CFM is obviously a great engine repair specialist and developer of PMA parts and that sort of thing. So it was fascinating for me. But what he said was so shocking because, okay, I just want to rewind to almost 20 years ago when American Airlines placed an order for LEAP-powered 737 MAXs, basically launching the Boeing 737 MAX with the LEAP engine in response to Pratt & Whitney’s launch of the GTF on the Airbus A320, launching the A320neo. Both of those engines were promising a whole step change—a leap, as it were—in performance and specifically fuel burn.

Sean Broderick (11:34):
Eventually, the catch-up will happen. Back in the beginning of the V2500 era and the CFM56 era, there were problems then too. You just don’t remember them, and we got through them. It’ll be the same with these. But I think the reality is setting in that that’s simply not the case. Great technology, great engines, but at an extremely high cost for operators—not just monetarily, but in terms of reliability and availability.

Guy Norris (12:04):
Yeah, no, you’re absolutely right, Sean. I think because the CFM56 and V2500 era brought in mostly noise-related improvements and decent efficiency gains, the leap to this next level wasn’t a step too far because, obviously, they achieved it. But in terms of reliability and time on wing, they pushed the edge of the state of the art and beyond. That was a realization that all of these folks have come up against. You keep pushing thermodynamic limits, especially in the hot section, and no matter how much air you pump through the bypass to improve overall propulsive efficiency, if you’re really relying on that core and those thermodynamics, you’re in trouble if you don’t carefully manage what you’re doing—especially in harsh environments, which is what we’ve seen a lot of.

Lee Ann Shay (13:05):
I think we’d be remiss if we didn’t also mention that the ramp-up of these engines is so much higher than before.

Guy Norris (13:13):
Totally compounding the trouble. Totally. It’s all related, isn’t it? The great performance—yeah, everybody wants them. Production goes through the roof, and now you’ve got all these other engines, and there’s just not enough capacity to deal with everything at the same time.

James Pozzi (13:31):
No, not at all. And they’re ramping that up at a rate of knots as well. But the belief seems to be that there’s still maybe not enough capacity online right now for these engines that have obviously come off wing earlier than anticipated.

Lee Ann Shay (13:43):
Something just popped into my head. We can’t change history, but if COVID-19 hadn’t happened and we didn’t have the massive retirements and some of the supply chain problems, these programs still had a really steep ramp-up. It’s still the new technology that you’re talking about, but do you think it would’ve been as bad?

Sean Broderick (14:03):
It’s hard to imagine how the technological challenges would’ve changed if COVID-19 and the MAX groundings hadn’t happened. That was early in the LEAP-1B program. I don’t know how you get around those things—they would clearly be different. Obviously, they’d be different. We’d have more experienced people probably still around. We’d have more of the smaller suppliers still around, and it would’ve been a more sustainable supply chain. But the problems we’re talking about with the engines—they were unavoidable once the designs were locked in and production started.

Guy Norris (14:41):
Yeah, that’s true. The light at the end of the tunnel was actually a train—a big train. Unfortunately, that’s true. But to your point, it may have been slightly better. The recovery from the COVID disruptions absolutely uprooted the supply chain and hit it at such a deep level. We’re still seeing a recovery from that. It was massive. And, of course, the MAX accidents, in a way, put a big delay in the whole program, which, in some ways, was on the side of—certainly on the CFM side.

Sean Broderick (15:28):
Right. You don’t want to say something like that helped, but one silver lining of the slowdown was that things like the kits they’re developing now—the RBS kit, the entry into service, or the buildup of cycles on those airplanes—slowed for the better part of a year or two, depending on where you were. So they could kind of set those aside for a second and focus on the LEAP-1A.

James Pozzi (15:57):
And with the supply chain—I don’t know if anyone agrees—but it seems like the estimates for normalization, whatever that looks like, are even more conservative than ever. I swear it was only a couple of years ago people were saying 2026 or 2027. Obviously, we’re in 2026 now, but I’ve heard at least two or three different speakers cite 2029 or 2030 as when the supply chain will reach some form of, I don’t know, acceptability or normalization—whatever you want to call it. If it does go back to the same as it was, it may look permanently different as well. But it seems to be more conservative than ever right now, from what I’ve heard.

Guy Norris (16:40):
And just to jump on what James just said—I was at the Singapore Airshow last week, and Pratt & Whitney Commercial President Rick Deurloo said more or less the same thing. He said 2030 is now kind of when they think normalization is going to happen. That just shows you the massive problem. Yeah, it’s been phased.

Lee Ann Shay (17:02):
True. Aviation Week’s fleet and forecast data show that retirements have been historically low since 2021, and they’re starting to slowly uptick. But 2030 is kind of the year when all of that starts.

Sean Broderick (17:18):
That keeps getting pushed to the right. Every year, it gets pushed a little further to the right. I’ll just circle back real quick, James, to your comments about partnerships at the beginning. I think we’re already seeing a reshaping of the supply chain. All of that commentary and change happening in the North American market—that’s from a fleet growth standpoint, the slowest-growing region in the world. So all those changes are happening to serve the existing fleet and maybe some things they want to bring back in, but it has nothing to do with growth because growth is pretty stagnant in North America in terms of aggregate fleet size. So I think you’re already starting to see it—or at least the evidence of it—the reshaping of how customers want their supply chain set up.

Lee Ann Shay (18:03):
I want to jump back to what James said about the scarcity of assets. I think availability and scarcity are two keywords I’ve heard a lot over the last two days. But that scarcity of assets is driving module repairs. It’s driving repairs, repairs, repairs. Rudy Bryce, the President and CEO of CFM Materials, said today that if someone calls him up asking for a part, it’s either, “Yes, I have it,” or, “No, I don’t have it.” But if you call him six to 12 months out, then he can maybe try to get the part much, much better. So it goes back to long-term planning. But again, the scarcity of assets is also triggering a lot of different actions and activities in the market.

James Pozzi (18:53):
Well, airlines are stocking up on more parts as well. That seems to have become a trend to mitigate the lack of availability of parts, for example, because that’s still a major problem, as you said. And yeah, it seems like that’s a reversal from the pandemic era when airlines, for cash flow reasons, were selling off parts in mass quantities to vendors, for example, to parts vendors. But they seem to be stocking up in bulk now more than ever. Whether it’s low-cost airlines buying more parts or established carriers stocking parts as well, it seems to be a trend.

Sean Broderick (19:33):
A turnaround in long-term planning. So, Guy Norris, when was the 777-9 supposed to enter service originally? Was it 2020 or 2021? And it was with Emirates?

Guy Norris (19:43):
Yes.

Sean Broderick (19:44):
Okay. So let’s say you’re Emirates, and you were planning for that airplane to enter service six years ago. How on earth do you plan in that interim six years for such a big asset? Or if you’re Southwest Airlines trying to plan your 737-700 retirement schedule based on the 737-7? Again, planning a year in advance is all well and good. If you ask Boeing what they’re going to be able to deliver in a year, they’re more accurate now than they were a year, two, or three years ago. But even with Airbus, it’s really hard on some of these fleet types, especially when you’re not expanding but replacing.

Guy Norris (20:19):
And one thing, Lee Ann, I was going to just pitch in—Brian Kough, who’s our Principal Analyst for Civil and Military Aerospace Prognostics and Product Offerings for our fleet and MRO forecasts, gave a really good presentation about the state of the market. One of the things he mentioned, talking about scarcity, was the fact that assets have been driven so high in value that an engine on, say, an A320neo is now worth 60–70% of the entire aircraft. That was amazing. It was amazing. And then later on, during the coffee break, he showed me something. They’d just been down to Chile, to Santiago, where he said, “Look at this. This is an A321neo. It’s only four or five years old, and it’s been broken down—mostly because the engines are now worth more than the whole thing. They want to get that engine and sell it to somebody else because they can make more money out of it than keeping that airplane going as a viable, money-making product.” I couldn’t believe it, but I’m probably naive. Okay, I’m naive in this way, but—

Lee Ann Shay (21:33):
Gee, people mentioned those $5 million CFM56-5B engines that really don’t have much time left on them. They’re meant for teardown. So a teardown engine is going for $5 million?

Guy Norris (21:45):
Right. And I think Sean has a story about other uses for CFM56-5Bs.

Sean Broderick (21:52):
I was working on that—the industrial gas turbine world. We’re hearing more about that nascent but quickly growing market—the repurposing of airplane engines, like the CFM56s in this case. And you hear that, based on everything we just talked about here, oh my gosh, if they need 100 or 200 or 300 of these, how can that not have an impact on the current market? But the conventional wisdom from people who know way more about this than I do—and that’s a very long list of people—is that by the time the demand gets there on the industrial gas turbine side to power data centers (and it’s mostly data centers), we’re going to see a reduction in demand for similar assets in this space. We just talked about the retirement curve—it keeps moving to the right. Eventually, they’re going to start retiring these, and more MAXs are going to be delivered, and more Neos are going to be delivered. Maybe demand for lift slows a little bit. So more of those CFM56s are going to be leaving the market by the time the industrial gas turbine sector can absorb all of those. There’s going to be enough to absorb that. That seems to be the conventional wisdom. But boy, sitting here now, talking about, “Oh, do we need 200 or 300 more CFM56s? We need these parts.” It’s like, “Oh man, hold on a minute. We’ve got enough problems. We don’t need AI messing with the MRO world, please and thank you.”

Lee Ann Shay (23:16):
So that’s another podcast, Sean, and I’d really like you to write that article. But dear listeners, we’re not going to digress too much. We have so many things we could follow up on, but I really do think we should probably wrap this one up. So James, Guy, and Sean, thank you so much for joining me today on this MRO Podcast. And listeners, don’t miss the next episode by subscribing to the MRO Podcast wherever you listen to them. And one last request—please consider leaving us a star rating or writing a review. Thank you so much.