Turbulence in the aircraft engine market

The dashboard below offers detailed insights into engine market share by manufacturer, as well as the distribution of engine types among operators. It features customizable filters for aircraft type, engine model and operational status and can be used to analyze the implications of engine setbacks and assess their impact on operators and manufacturers. Interactive Freighter Engine Dashboard

Manufacturing issues

Over the past year, engine manufacturers have faced considerable challenges that affect production and reliability.

Recently, the GE Aerospace GE9X engine has experienced several delays due to issues with its high-pressure compressor and combustor liners, affecting 777X production. This has led to the extension of leases for 777-300ERs equipped with older GE90 engines, restricting engine availability for 777 conversion programs. GE engine freighter market share is 42%, of which about 23% are GE90-equipped production 777Fs, shown in Figure 1. With 777 conversion programs being certified this year, these numbers will rise significantly with high widebody demand in both passenger and cargo sectors. Figure 1 – GE90 Engine-Equipped Freighters by Operator and Engine Share within GE

In the narrowbody segment, unapproved parts found in 145 of CFM International 's CFM56 engines last year are exacerbating challenges faced by MRO operations. At the same time, Pratt & Whitney's PW1000G series and International Aero Engines V2500s encountered problems with contaminated powder metal, leading to unplanned engine removals and more inspections. Up to 1,300 engines could be impacted by 2026, loading additional stress on the MRO market.

MRO expansion and investment

Incredibly high demand has the MRO sector at its operational limits. This strain is made worse by the increased need for engine inspections and replacements, a labor shortage and a scarcity of parts. In response to these challenges, engine manufacturers and MRO facilities are making adjustments. MTU Aero Engines and other industry players are expanding their workforce and facilities. MTU expects to service up to 2,000 engines globally by 2027. However, a shortage of skilled labor, particularly in the United States, is impeding expansion efforts.

Looking forward, the engine MRO market is positioned for robust growth and substantial investment, with a compound annual growth rate of 4.9%, or $62 billion USD in 2032 ( Figure 2 ). By the late 2020s, we anticipate that the sector will face much less operational strain. Improved capacity and enhanced efficiencies are expected to stabilize the supply chain for parts and labor and the introduction of more reliable engine technologies will add to this improvement. Figure 2 – Engine MRO Market Value Projections

Impact on operators

Repercussions from engine and MRO issues are straining operators across the aviation industry. Airlines and cargo carriers that depend on affected engine models are facing operational delays and escalated maintenance and leasing costs. The scarcity of mature engines, due to extended maintenance, increased demand and, especially, a shortage of parts, has forced many operators to reschedule existing service commitments. This has resulted in decreased service availability and heightened operational costs. The need to move engines from aircraft slated for conversion to active passenger fleets further compounds supply pressures.

Operators are seeking alternatives, including leasing additional engines to maintain service levels amid ongoing shortages, leading to a boon for the engine lessor market. For example, Engine Lease Finance remarketed 210 engines last year and only 3% of its inventory is off-lease with current market conditions likely to continue.

Outlook, implications

Ongoing issues highlight the need for improved supply chain management, increased scrutiny of part sourcing and capacity expansion in the manufacturing and maintenance sectors. As the industry works to resolve these issues, the financial impact on operators, particularly in the air cargo sector, will likely continue, affecting profitability and operational efficiency. These challenges, however, also pave the way for advancements in engine technology and acceleration of more resilient supply and maintenance networks. Since engines significantly influence the operational limits of an aircraft, resolution of the issues will lead to enhanced performance and reliability in designs and service strategies.

To manage challenges related to engine supply and maintenance, freighter operators might consider more long-term contracts with manufacturers and MRO providers to gain access and cost stability. Investing in OEMs and MROs will also increase capacity and secure parts and services, providing a competitive edge in the longer term. Additionally, an understanding of regional labor markets can inform decisions on where to expand or establish MRO facilities

Turbulence in the aircraft engine market

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