Aircraft Deliveries: a Blessing for the Industry and a Nightmare for Airlines

The decisions to remove aircraft or to cancel orders due to pilot shortage naturally raise questions about other industry players, such as MRO providers, that are also directly affected by the increase of plane production.


While both old and new players of the aviation industry are getting ready to welcome hundreds and thousands of new aircraft to their fleets, the industry itself seems to send some worrying signals. For instance, recently Republic Airlines has disclosed it would be removing 27 of its 243 aircraft from service because of the lack of qualified pilots and can potentially cancel its order for 40 CS300 aircraft. Great Lakes Aviation has also suspended six services due to industry-wide pilot shortage. Despite the fact that there are a lot of other factors to consider, is it possible that the upcoming number of new aircraft is simply too large for the market to handle?

The growth of the global aircraft fleet is no big news for the industry. As the demand strengthens, the airframers are raising the manufacturing rates of the existing products and accelerating the assembly stages of the new ones. For instance, recently Mitsubishi Aircraft Corporation has informed that the structure of the first Mitsubishi Regional Jet is complete and the company is nearing the final assembly stage of the first prototype, with the customers already lining up for 165 aircraft. The Chinese airframer Comac is also expected to launch the final assembly stage of its first test C919 aircraft, which has garnered 400 orders so far. Moreover, Airbus has been thinking about the introduction of new aircraft that would bridge the yawning market gap between the A350-1000 and the A380, which Boeing has exploited with the 777-300ER and 747-8 and will most likely continue to dominate the market with the 777X from 2020. Therefore, a lot of experts believe that Boeing and Airbus rivalry will eventually force Airbus to introduce a completely new aircraft family. 

In the meantime, more and more MRO providers around the world are complaining about the worsening situation with regard to available workforce. For instance, Hong Kong-based HAECO’s profitability is continuously getting hit, despite the company’s attempts at taking various measures to improve the situation: in 2013 the company’s airframe man hours sold fell by 18%, while its profit decreased by 75.3%. Many Canadian MRO providers have also expressed their worries about the evaporating talent pool, as the current generation of technicians are getting closer to the age of retirement, with a few new ones coming to replace them. Moreover, the new-generation of aircraft is driving the growth in demand for the new types of skills. On the other side of the globe, Pratt & Whitney representatives in Singapore have also reported facing a shortage of MRO talent and the recent research has revealed the same problems in the Middle East. Whether or not these separate cases can be viewed as the symptoms of the same illness, the industry experts state they still have to be addressed with all the seriousness.

“The decisions to remove aircraft or to cancel orders due to pilot shortage naturally raise questions about other industry players, such as MRO providers, that are also directly affected by the increase of plane production. Of course, the federal law which has increased the minimum flight experience for most commercial aviators to 1,500 hours from 250 in the U.S. has also dramatically increased the time and cost to become a pilot, which, in turn, has further prompted pilot shortage. However, is it possible that, as the deliveries roll out, it will appear that such an amount of aircraft is simply too much? Can the industry choke?” asks Kestutis Volungevicius, the Head of FL Technics Training.

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