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Supply-Chain Woes Begin to Hit the Aviation Industry

Supply-chain delays and components shortages are spilling over into the aviation market, making it difficult and more costly for planemakers to get ahold of certain parts. This comes as demand for commercial planes is surging, and could put the airline industry’s recovery at risk.

So far the aerospace industry has avoided component shortages, largely because Boeing (BA) and Airbus (EADSY) are making fewer planes. But demand for narrow-body jets is now surging, leading to shortages of semiconductor chips, plastics, and other materials used to build planes. For example, PPG Industries (PPG), a paint and coating supplier for the aerospace market, is facing significant shipment delays.

The Airline Industry Works to Recover From Pandemic Challenges

Rising costs and shipping delays are worrisome for the aviation industry. The sector is beginning to recover from the pandemic, but it is still on shaky ground. Overall weak demand makes it tougher for equipment makers and suppliers to pass along increased costs.

In the first half of 2021, aviation companies paid between 27% and 44% more for raw materials compared to a year earlier. The industry is also facing shortages of skilled workers which hurts production. To meet expected production increases next year and beyond, aviation companies need more staff.

Aviation Industry Shoulders More Costs

To circumvent supply-chain issues, aviation industry companies are finding creative solutions. For example, planemaker Embraer (ERJ) is holding on to more inventory at its warehouses despite increased costs. Embraer has increased inventory at local warehouses across the globe to limit shipping disruptions.

For now the aviation industry appears to be taking supply-chain hiccups in stride. But if Boeing and Airbus decide it is time to begin producing more planes again, they could come up against constraints. Since that is not expected for another year or two, the aviation market may not face the same supply-chain damage that the vehicle industry has dealt with. It will be interesting to watch how the aviation industry manages business conditions heading toward the end of the year.

About Steve Rhode

The Public Safety Flight website is dedicated to news, honest information, tips, and stories about the use of unmanned aircraft systems (UAS), UAVs, aircraft, and drones in the fire service and other public safety niches.The site was founded by Steve Rhode, an FAA-certificated airplane commercial and instrument certificated pilot and a very experienced Part 107 UAS commercial pilot. Steve is the Chief Pilot with the Wake Forest Fire Department and the North Carolina Public Safety Drone Academy. He also provides expert advice to drone pilots through Homeland Security Information Network and he is an FAA Safety Team drone expert. Steve loves to work closely with public safety pilots to answer questions and share information, real-world truth, and drone operation advice. You can contact Steve here, learn more about Steve here, or join his public safety pilot private email list here.

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