Challenges and Risks of Aging Aircraft

Commentary by Toma Matutytė, CEO of Locatory.com

The aviation industry faces a conundrum: a growing number of aging aircraft taking to the skies. Maintaining older jets offers economic advantages, yet it also presents its own problems and risks. While most of these are apparent even to newcomers in the industry, the current situation, with the order backlog for new aircraft hitting all-time records, brings its own unique set of challenges.

Increased Maintenance Needs and Safety Concerns

Over the past 35 years, data from IATA shows that more than 16,000 commercial aircraft have been retired globally, with an average of 700 reaching the end of their service life each year. This trend is projected to accelerate, with an estimated 11,000 retirements expected in the next decade. However, this outlook is complicated by a significant backlog of new aircraft deliveries, particularly narrow-body models. The surge in demand, exceeding even recent projections, has outpaced manufacturers' production capacity. Consequently, many planned aircraft retirements in the coming years might be postponed.

Extending an aircraft's lifespan undoubtedly increases maintenance demands. Age brings wear and tear, requiring more frequent and thorough inspections, along with potential replacements of parts reaching their fatigue limits. This translates to higher costs, longer ground times, and potential disruptions to flight schedules. Airlines must carefully balance these expenses with the benefits of delaying expensive new aircraft purchases. And the current aviation landscape, characterized by an unprecedented surge in air travel demand, poses significant challenges.

Aircraft manufacturers are struggling to keep up with this demand, resulting in a backlog of orders for new aircraft. In such a scenario, operators are compelled to reconsider the retirement of older aircraft. With the increased demand for air travel, these aging planes have become more commercially viable than before.

Delayed Deliveries

Operators are forced to weigh the economic advantages of extending the lifespan of older aircraft against the potential drawbacks, such as increased maintenance costs and potential disruptions. This complex decision-making process underscores the delicate balance airlines must maintain in navigating the evolving dynamics of the aviation industry.

The global commercial aviation industry currently operates a fleet of over 30,000 aircraft, with more than 10,000 exceeding 20 years of age. As aircraft age, maintenance costs inevitably rise, averaging around $1 million annually. This increasing burden on airlines became particularly pronounced in the past year, as they navigated the early stages of post-pandemic recovery. In 2021 alone, airlines collectively shouldered over $10 billion in maintenance and repair expenses, highlighting one of the industry's most significant challenges. This financial pressure is expected to intensify in the coming years.

While age doesn't automatically equate to compromised safety, the potential for issues rises. Extensive maintenance programs, robust regulatory oversight, and proactive risk management are crucial to mitigating these concerns. Airlines must invest in advanced inspection techniques, skilled technicians, and rigorous training to ensure older aircraft remain airworthy. However, a heightened level of vigilance and a zero-tolerance policy for deferred maintenance are essential.

Production delays plaguing new aircraft deliveries have pushed airlines towards extending the life of older jets. While financially appealing in the short term, this strategy can backfire. Operating older aircraft often translates to higher fuel costs, lower fuel efficiency, and reduced passenger comfort compared to modern counterparts.

These factors can negatively impact competitiveness and profitability in the long run. Airlines must carefully analyze the trade-offs and weigh future costs against short-term relief.

Spare Parts: An Unpromising Challenge

As the number of older aircraft grows, so does the demand for spare parts. This can lead to shortages, driving up costs and causing delays. Manufacturers prioritize production of parts for newer models, leaving airlines scrambling for components for their aging fleets.

Therefore, right now we have a situation where spare parts for older aircraft become in a very limited supply. Some projections aren’t very positive, to say the least. For example, Airbus report predicts a looming 40% gap between demand and supply for spare parts in the A320 family by 2035.

And it seems very real for virtually everyone within the industry. Here's an example of how rapidly prices are increasing for older powertrains: the CFM56 engine, which powers fleets of Boeing 737s and Airbus A320s. Prices for its parts have jumped 30% in the past five years.

And, let’s say, it's not just about pocket change, as, for example, the critical hot section blades in the CFM56 engine. Replacing a complete set now sets an operator back a $1.7 million – and even finding a whole set of such blades is becoming very hard.

Now, I'm not fear-mongering, but ignoring this reality wouldn’t be good for any business. We're facing a complex challenge here: soaring costs and limited access to parts, both pushing the operational boundaries of older aircraft. And there are obviously even some safety-related implications, as aircraft require more vigilant maintenance, but limited parts availability threatens our ability to uphold the highest safety standards. Imagine a critical repair delayed due to lack of parts – not a comforting thought.

There is also an economic strain. Airlines are already dealing with fuel price fluctuations and a complex post-pandemic recovery. Add skyrocketing maintenance costs to the mix, and economic viability for older aircraft becomes a serious question.

Additionally, environmental impact is a very important topic today. Keeping older, less fuel-efficient jets in the air longer contradicts our sustainability goals. We need a strategic approach that balances safety, economics, and environmental responsibility. Airlines must explore alternative sources, engage in effective inventory management, even strategic stockpiling, if it seems viable and business can afford it.

The Human Factor

Maintaining the expertise required to service aging aircraft presents another challenge. Technicians trained on newer models may lack the skills needed for older systems. Airlines must invest in upskilling initiatives and knowledge transfer programs to bridge the gap. Additionally, attracting and retaining talent capable of handling complex maintenance tasks becomes crucial in an industry facing a skilled labor shortage.

It is frequently mentioned that such challenges are demanding answers, which industry already familiar with. And technological advancements often are the most straightforward answer. Moreover, their implementation usually aligns with sustainability goals, for example, modernizing older aircraft with fuel-efficient technologies can mitigate environmental impact and potentially offer economic benefits.

Another answer is, of course, collaboration. Airlines can share resources, expertise, and spare parts through strategic partnerships to alleviate individual challenges and optimize costs. They have been doing so in the face of one crisis or another for decades already, so it is definitely a proven way to overcome the financial burdens of these days.

Additionally, I would also mention an importance of the long-term planning here. Airlines must meticulously plan their fleet strategies, considering future replacement needs, technological advancements, and economic factors.

All in all, the decision to extend an aircraft's lifespan is not one to be taken lightly. A thorough understanding of the associated challenges and risks is crucial for airlines to make informed decisions.