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The supply chain strains hampering the aerospace industry could persist for another two years, the head of Rolls-Royce has warned, in one of the bleakest assessments yet of the challenges facing manufacturers.
Tufan Erginbilgic, chief executive of the UK engineer whose engines power some of the world’s largest aircraft including the Airbus A350, said the industry was in the throes of “one of the worst supply chain environments it has ever experienced”.
Companies were dealing with a range of issues, from shortages of skilled labour to parts. The supply crunch could last for another 18 to 24 months, he said at the Farnborough air show.
The industry had been among the hardest hit by the Covid pandemic only to bounce back sharply amid resurgent demand from airlines for new aircraft. Manufacturers and their suppliers, said Erginbilgic, were also “recovering to a moving target because the industry is still growing”.
Despite the supply chain problems, he said demand for air travel remained strong. The company is investing more than £1bn over the coming years to improve the durability and performance of its Trent family of engines which power widebody aircraft.
It is also working on a smaller version of its UltraFan engine demonstrator to explore technology for the narrow-body jet market.
Erginbilgic’s comments on the supply chain echo those of other industry executives at the air show, even as Airbus and Boeing notched up more orders from airlines. Airbus announced orders from Japan Airlines and Virgin Atlantic on Tuesday, while Boeing sealed a deal with Qatar Airways.
GE Aerospace on Tuesday raised its profit outlook for the full year but warned that shortages of materials had hit shipments of its engines.
The company said deliveries of its Leap engines, which power Airbus and Boeing narrow-body jets, were down 29 per cent in the second quarter to the end of June from the same period a year ago.
Campbell Wilson, chief executive of Air India, which placed one of the biggest aviation orders globally last year from both Boeing and Airbus, said “we are talking a good couple of years” before the supply chain challenges are under control.
While Boeing has had production of its best-selling 737 Max aircraft capped by US regulators as it seeks to raise its manufacturing standards following the mid-air blow out of a section of one of its planes in January, Airbus has also had to push back plans to ramp up output.
The European plane maker cut its annual profit outlook last month and warned of fresh supply chain snarls. It said it would deliver “around 770” commercial aircraft this year, down from a previous forecast of 800.
The company also pushed back its target of producing 75 a month of its best-selling A320 family of jets from 2026 to 2027.
Airbus at the time singled out engine shortages from Pratt & Whitney as well as CFM International, both suppliers to the popular A320 family, among the challenges.
Airbus has also launched an efficiency programme to help counter rising costs and boost productivity at its commercial aircraft business. Christian Scherer, head of commercial aircraft at Airbus, separately told the Financial Times on Monday, that demand for new aircraft remained strong.
“The fact that our delivery rate is constrained by some supply chain issues . . . is frustrating because we should be surfing right now and enjoying, finally, the relief from these difficult years the whole industry has gone through,” said Scherer.
“Instead, the company is “running from one supply issue to another,” he added.
With both P&W and CFM investing in their supply chains, Scherer said he expected these investments to “bear fruit early next year”.
Tony Douglas, chief executive of Riyadh Air, said manufacturers were being more open and realistic about delivery delays. “There is a lot more honesty out there now. I think we have moved through the denial phase. There was a period of denial.”
