Welcome to Extreme Investor Network, where we bring you exclusive insights and analysis on the latest business news. Today, we dive into the world of aircraft engine repairs and overhauls, highlighting the challenges and opportunities facing airlines and engine shops worldwide.
In a bustling engine shop at American Airlines’ maintenance facility in Tulsa, Oklahoma, the airline is ramping up its engine overhauls by 60% this year, aiming to complete more than 16 engines per month. This surge in demand for engine repairs is reflective of a broader industry trend, as airlines grapple with delayed deliveries of new airplanes from Boeing and Airbus, along with parts and labor shortages.
The repair and overhaul of engines has become a $58 billion business this year, up from $31 billion before the pandemic, according to Alton Aviation Consultancy. This boom has been a cash cow for engine makers like GE Aerospace and specialized engine service providers like Pratt & Whitney and Rolls-Royce. American Airlines, in response to the growing demand, has taken matters into its own hands by performing more of the work in-house.
While the high demand for engine overhauls presents a windfall for engine suppliers, it has also led to bottlenecks in the supply chain. Shortages of skilled workers, key components, and delays in new aircraft deliveries have contributed to longer turnaround times and increased costs for airlines. Some carriers, like JetBlue Airways and Spirit Airlines, are deferring new jet deliveries to save money amidst the ongoing challenges in the engine supply chain.
Despite the challenges, engine makers like GE Aerospace are investing heavily in upgrading their engine shops around the world to meet the rising demand. Airlines, on the other hand, are facing challenges in finding alternatives to costly engine overhauls, as rental rates for spare engines continue to rise. For airlines like Delta Air Lines and American Airlines, managing engine repairs and overhauls has become a critical part of their operations.
In conclusion, the surge in demand for engine repairs and overhauls poses both challenges and opportunities for airlines and engine shops. Stay tuned to Extreme Investor Network for more exclusive insights and analysis on the dynamic world of business news.