Aeroji Blog

The Future of Aviation Supply Chain

Aviation Business
The aviation industry is facing a complex dilemma: how to meet the rising demands of airlines while overcoming the operational hurdles of a post-pandemic world. With labor shortages, parts scarcity and idle planes, suppliers are struggling to keep up with the pace of recovery. What kind of investment is needed to bridge this gap? How are OEMs and MROs adapting to the new challenges and helping operators balance supply and demand? The key to success is agility, but it also requires collaboration. Are we having the right conversations to build a more resilient and proactive ecosystem?

The Spare Parts Puzzle

The COVID-19 pandemic has devastated the airline industry, with revenues dropping by 60% in 2020 compared to 2019. The sector was expected to be smaller for years to come, with traffic not returning to pre-pandemic levels before 2024. As commercial flying hours have picked up in most parts of the world, so has maintenance activity. Aircraft heavy checks and engine shop visits that have been deferred during the pandemic have become necessary, bringing with them demand for new parts, parts manufacturer approval, repairs and used serviceable material (USM).

However, aviation supply chains are struggling to keep up with the pace of recovery in the core passenger market. Labor shortages, raw material scarcity, geopolitical tensions and delivery delays are some of the factors that are affecting the availability and cost of aircraft parts. Some airlines are being forced to ground flights due to a shortage of spare parts, while others are keeping some aircraft on standby or flying them for fewer hours to manage the effects of engine maintenance delays. The shortfall in plane parts could mean further travel chaos for passengers this summer.

To overcome these challenges, airlines need to invest in strengthening their supply chain resilience and agility. This means diversifying their sources of parts and services, building strategic partnerships with suppliers, leveraging digital tools and data analytics to optimize inventory and maintenance planning, and adopting circular economy practices to extend the life cycle of parts and reduce waste. Airlines also need to reevaluate the economics of their operations, especially long-haul flights, as business travel is expected to recover slower than leisure travel and contribute less to profitability. This could entail revisiting pricing strategies, network design, fleet composition and product offerings.

How to beat the spare parts shortage

One way that airlines can diversify their sources of parts and services is by implementing dual or multiple sourcing strategies for critical materials. This can help reduce dependency on single suppliers and mitigate risks of disruption or price volatility. For their fleets of Airbus A320neo, certain airlines, for instance, have begun acquiring engines from both Pratt & Whitney and Rolls-Royce. Another way that airlines can diversify their sources is by moving from global to regional networks, which can shorten lead times and increase responsiveness. During the pandemic, some airlines have therefore relocated their maintenance activities from Asia-Pacific to Europe or North America.

Building strategic partnerships with suppliers can also help airlines enhance their supply chain resilience and agility. This might include sharing information, aligning incentives, collaborating on innovation and co-investing in capabilities. As an example, several airlines have formed long-term agreements with OEMs or MROs to provide comprehensive engine maintenance services based on performance indicators such as reliability, availability and fuel efficiency. These agreements can help airlines reduce maintenance costs, improve engine performance and access new technologies.

Leveraging digital tools and data analytics can help airlines optimize their inventory and maintenance planning. A possible way to do this is to use advanced algorithms to forecast demand and supply patterns, monitor inventory levels and replenishment cycles, identify potential bottlenecks or shortages, and trigger corrective actions. Cloud-based platforms that merge data from different sources such as flight schedules, maintenance records, supplier databases and weather forecasts are an example that some airlines have implemented. By using these platforms, airlines can boost their visibility and their decision making across their supply chain network.

Adopting circular economy practices can help airlines extend the life cycle of parts and reduce waste. This can involve repairing, refurbishing or remanufacturing parts instead of discarding them; reusing or recycling materials instead of disposing them; or designing products that are more durable, modular or upgradable. Some of the partnerships between airlines and OEMs or MROs to source used serviceable material (USM) for their aircraft maintenance needs are an example for that. USM can offer significant cost savings compared to new parts while maintaining quality and safety standards.

Original equipment manufacturers (OEMs) and maintenance, repair and overhaul (MRO) providers also need to be creative and flexible in responding to the changing needs and expectations of airlines. They need to ramp up their production and delivery capabilities by working with their suppliers, investing in automation and digitalization, expanding their global footprint and offering innovative solutions such as power-by-the-hour contracts, engine leasing, predictive maintenance and remote inspections. They also need to align their environmental goals with those of airlines and regulators by developing more fuel-efficient and less polluting engines and components.


The aviation industry is resilient and optimistic about its recovery from the pandemic. However, this recovery depends on how well the industry can work together to address the supply chain bottlenecks and imbalances that are hampering its performance. Airlines, OEMs and MROs need to have meaningful conversations and collaborations to create a healthier ecosystem that is more proactive and solutions-focused. By doing so, they can not only improve their operational efficiency and financial viability but also enhance their customer satisfaction and environmental sustainability.