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As demand for aviation reaches record levels, supply chain chaos will become the new norm.

Executives and suppliers claim that even years after the pandemic the aviation industry still struggles to recover from supply disruptions. These have been made worse by the record passenger demand, and geopolitical issues.

Airbus and Boeing have had to delay some deliveries because they are juggling the competing demands of new plane assembly, maintenance and repair for existing fleets.

Jeffrey Lam, chief operating officer and President of ST Engineering, the largest provider of airframe maintenance and repairs in the world, said that prolonged supply delays and bottlenecks have become "the new norm".

"We fear that this new standard will remain, which is totally unacceptable," he said on the sidelines this week of Singapore Airshow.

Leslie Thng, CEO of Singapore Airlines, said that the shortages also drive up the costs for airlines like Scoot.

He said: "We also proactive, for example, secure additional spare engines on our own expenses to ensure that the impact of engine problems can be minimized."

Demand for Records

According to the International Air Transport Association's data, the global air passenger traffic in 2025 will be at a record level. It was 9.3% higher than the pre-pandemic levels in 2019. This year it is expected to increase by another 4.9%.

IATA reported that to keep up with demand, airlines operate older planes for two more years than the average. This will increase fuel, maintenance and engine leasing costs, as well as inventory costs, by approximately $11 billion between 2025.

IATA Director-General?Willie Walsh said: "It is very frustrating and you can see that these suppliers are absorbing a massive amount of additional costs. It's time to improve the situation."

Gael Meheust of CFM International, CEO, said that the company was able to increase production following the pandemic but the demand had been "incredible".

"That is the paradox we find ourselves in." The supply chain...cannot meet the ramp-up demand, but the demand has reached a level we could never have imagined.

He said that the company, a joint-venture between GE Aerospace, and Safran, had increased production by 25 percent in 2025. The output is expected to increase by 10 percent every year.

ST Engineering, an engine nacelle manufacturer, says it takes six weeks to make a nacelle, but the total lead time for material and component orders has now stretched to one year, as opposed to nine months after post-pandemic disruptions.

Lam says that even placing early orders to ensure that the company has enough inventory does not fully solve the problem. He said that because some of the shortages are global, it is not possible to buy components early.

GEOPOLITICAL CHALLENGES

The war in Ukraine has also caused a shortage of titanium and nickel tubes, which is exacerbated by the Russians' refusal to allow access to their exports. These Russian exports accounted for half of global titanium supplies, according Paul Wingfield, account manager of Future Metals (a Berkshire Hathaway affiliate) based in the U.S.

Wingfield stated that the current lead time for titanium and Nickel tubing is 50-60 weeks. This is down from 60-70 weeks one year ago but still a long way from the 20 week norm before pandemic.

Wingfield explained that the mills were unable to make enough material to catch up because they had stopped production for four years. When everyone ramps up, there is a shortage of material on the market. The mills have to play catch-up.

While the chaos that followed the pandemic has caused problems for some suppliers, it has also created opportunities for others.

Feng Haotian is a sales engineer for the Chinese carbon brake disc manufacturer Shandong Stopart Brake Material. He said that disruptions made it difficult to get parts from Western Original Equipment Manufacturers and it helped to double its international sales in last year.

Stopart's four-disc brake set, priced between 200,000 and 300,000 yuan (between $27,400 and $41,100), costs almost half as much as similar products.

Some new customers who didn't buy from us before now have no choice but to purchase our products.

(source: Reuters)