GE Aerospace CEO Attributes Boeing, Airbus Engine Shortages to Supply Chain Disruptions, and More
Dear readers,
Welcome to AviationOutlook Newsletter, your one-stop source for the most relevant Aviation & Aerospace news briefs and industry insights.
Here are the important updates for today. Let’s get started.
Dozens of Suppliers Involved in Boeing, Airbus Engine Shortages, Says GE Aerospace CEO
GE Aerospace CEO Larry Culp has attributed the ongoing jet engine delivery delays to persistent supply chain disruptions, which are impacting both Boeing and Airbus aircraft production.
GE says it’s working closely with suppliers to resolve these issues and ramp up output to meet the increasing demand from aircraft manufacturers.
Key Points
- Over a dozen suppliers are involved in the disruptions that have slowed the delivery of GE's jet engines to Boeing and Airbus.
- Supply chain constraints continue to impact the aviation industry in 2024, with shortages of engine parts, skilled labor, and raw materials like forgings, castings, and electronics.
- GE Aerospace, which supplies LEAP engines for Boeing 737 MAX through joint venture CFM International, has had to reduce its engine production forecasts from 20-25% growth to 10-15% for 2024.
- CFM International, a joint venture between GE and Safran, has faced challenges with its LEAP engine production due to a shortage of usable parts for high-pressure turbine blades from supplier Howmet Aerospace.
- Pratt & Whitney, which supplies engines for the A320neo family, has also encountered issues leading to engine recalls and aircraft groundings.
- Supply chain problems have forced Airbus to reduce its 2024 delivery target from 800 to 770 aircraft, affecting both A320 and A350 deliveries.
What It Means
The engine shortages mean that Boeing and Airbus will continue struggling to meet their ambitious aircraft production ramp-up goals. Meanwhile, Airlines are facing longer wait times for new jets and are relying more on older aircraft, driving up demand for spare parts and engine overhaul services.
Despite the challenges, GE Aerospace remains optimistic about increasing profits in the coming years as engine deliveries gradually accelerate and high-margin aftermarket work booms.
However, the persistent supply chain problems could continue to constrain industry growth into 2025 and beyond.
Other key Aviation and Aerospace Industry updates for today 👇
Boeing Secures $21B in Expanded Share Shale Amid Financial Turmoil
Boeing raised $21 billion through an expanded share sale, surpassing initial expectations.
The company sold 112.5 million common shares at $143 each and $5 billion in depositary shares.
This capital infusion aims to strengthen Boeing's balance sheet amid ongoing financial challenges, including a seven-week labor strike and production issues.
Lufthansa Q3 Earnings Dip Amid Core Brand Challenges
Lufthansa Group reported a 9% drop in Q3 operating profit to €1.3 billion, despite record revenue of €10.7 billion.
The decline was primarily due to struggles at its core brand, Lufthansa Airlines, facing increased competition, lower yields, and rising costs.
The company has launched a turnaround program targeting €1.5 billion in earnings improvement by 2026, while maintaining its full-year outlook.
New DOT Rule Mandates Instant Airline Refunds for Travel Disruptions
The Department of Transportation's new rule, effective this week, requires airlines to automatically refund passengers for canceled flights or significant delays (3+ hours domestic, 6+ hours international).
Refunds apply to baggage fees for delayed luggage and unused paid services.
Airlines must process refunds within 7 business days for credit card purchases, simplifying the compensation process for travelers.
LATAM Expands Fleet with 10 New Boeing 787 Dreamliners
LATAM Airlines Group has ordered 10 Boeing 787-9 Dreamliners with options for five more, planning to expand its fleet to 52 by 2030.
As Latin America's largest 787 operator, LATAM aims to enhance capacity on popular routes and launch new ones, including nonstop service to Sydney.
The order follows LATAM's improved financial outlook and plans to receive at least two 787s annually from 2025 to 2030.
16-Hour Flight: American Airline's Longest Route Connects Texas to Queensland, Australia
American Airlines completed the world’s longest non-stop flight from Dallas-Fort Worth to Brisbane on October 28, 2024.
The Boeing 787-9 covered 8,303 miles (~13,357 km) in nearly 16 hours, marking a milestone for the airline. The inaugural flight carried 285 passengers and was livestreamed, attracting over 12,000 viewers.
This new route will operate five times weekly, increasing to daily flights from December through March.
World's First Mass-Production Flying Car Plant Underway
Xpeng Aeroht, a subsidiary of Chinese EV maker Xpeng, has broken ground on the world's first mass-production flying car factory in Guangzhou, China.
The facility, set to open in 2026, will have an annual capacity of 10,000 units for the "Land Aircraft Carrier" modular flying car.
Pre-sales are expected to begin by the end of 2024, with a price tag of around $280,500.
Emirates Expands Southeast Asian Reach with Vietnamese Airline Partnerships
Emirates has signed Memorandums of Understanding (MoUs) with Vietnam Airlines and VietJet to enhance connectivity between Dubai and Vietnam.
The agreements aim to expand route networks, explore loyalty program benefits, and improve cargo and technical services.
Emirates plans to add a second daily flight to Ho Chi Minh City in January 2025.
DoD Audit Uncovers Millions in C-17 Spare Parts Overcharging
A Department of Defense audit revealed Boeing overcharged the Air Force for C-17 spare parts, with some items marked up by 7,943%.
The audit found 26% of reviewed parts were overpriced, totaling $4.3 million. The DoD Inspector General recommended enhanced oversight and price monitoring.
This follows a 2018 controversy where the Air Force paid about $10,000 each for toilet seat covers. It was later found that those parts could be produced by 3D printing for just $300.
