Two years on, global aviation yet to recover from covid

Not enough parts are available to manufacture planes because of a persistent supply chain bottleneck, forcing several airlines to lease jets instead, often at higher prices.

There’s a scramble even for those leased planes.

“Globally, the market is getting tighter," Richard Nuttall, chief executive officer of Sri Lankan Airlines, told Mint.

“If you want a new aircraft, for most aircraft models you are looking at a general timeframe of 2030," he said. And “leased aircraft are not coming back to the market as originally expected because for airlines… their deliveries are delayed, (and) they cannot order new aircraft."

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More than 70 aircraft of India’s largest carrier IndiGo are grounded due to issues with the Pratt & Whitney engines and their impending inspection, apart from a shortage of engines from the US company. Tata Group-backed Air India is awaiting parts for the refurbishment of its older fleet of aircraft.

“To retrofit aircraft, there are constraints with respect to the production and certification of the seats that we need to fit. So that might be pushed back a little bit," said Air India CEO and managing director Campbell Wilson. 

“But the componentry we need to upgrade the health of the legacy wide-body aircraft in particular, that’s a little bit slower than we would hope," he added. “So, unfortunately, that's the story of the industry at the moment. The supply chain is frustrating."

Some improvement, but not enough

Global aviation supply chain issues were triggered by the onset of covid as air travel ground to a halt. Airlines went into survival mode, leading to widespread layoffs to compensate for revenue loss.

The global aviation industry was also hit by the impact of Russia’s invasion of Ukraine war in 2022. Consequent trade tensions affected the aviation supply chain ecosystem and flight routes, as Russian airspace got closed to carriers from about 40 countries. 

Besides, Russia accounts for about 13% of the global production of titanium, a key component in airframe and engine parts.

The aviation supply chain ecosystem has improved when compared with 2022 and 2023, said Captain Naseer Al Salmi, chief operating officer, Oman Air. “But there are still issues with respect to delays across maintenance, repair, and overhaul units (MROs), aircraft deliveries, small components, spare parts, etc.," he said. “These issues will partially impact ramping up of capacity as deliveries get delayed."

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According to the Association of Asia-Pacific Airlines, a grouping of 20 carriers including Air India, Singapore Airlines, and Japan Airlines, the supply chain bottleneck is the main reason behind the slow-paced recovery of international air traffic to pre-covid levels.

As per the association’s latest data for April, its member airlines transported 28 million international passengers that month, which is 87.3% of 2019 volumes.

“There has been very slow improvement. It is not something that can be solved at short notice," AAPA director general Subhas Menon said. 

“New aircraft deliveries are taking 6 years. So airlines are going to leasing companies," Menon added. “Because of high interest rates, (aircraft leasing companies) have all raised their charges. That finally gets translated to the bottom line. So at the end of the day, it is a cost and efficiency issue."

No automatic taps

Because of a paucity of new parts, AAPA member airline Thai Airways has started replacing automatic taps in some of its aircraft lavatories with traditional ones.

“There are problems not just for taps, but also for chillers. The unavailability of several equipment is the reason why some of our 23 aircraft are grounded," said Thai Airways chief executive Chai Eamsiri on the sidelines of the International Air Transport Association Aviation Summit. “We expect this to be resolved in less than 2-3 years."

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For Nuttall of Sri Lankan Airlines, leasing remains the only option currently available despite the increasing competition.

“When there is an aircraft available and there are five carriers looking for it… with the economic situation in Sri Lanka and the airline, it has been a challenge," Nuttall said, adding that despite the competition the airline is optimistic about adding three Airbus A330s aircraft on lease by early 2025.