Flying High and Going Green: The Sustainable Revolution in Aviation Supply Chains 

2023-11-29 / 5 min

In recent years, the aviation industry has been above and beyond a very turbulent sky, facing headwinds from the COVID-19 pandemic, geopolitical struggles, and supply chain disruptions. However, there’s a silver lining amidst these challenges, as the global aviation sector is looking forward to a true comeback which is both long anticipated, as well as forecasted for at least a couple of years. 

Sustainability plays a vital role in this comeback, as the industry is recognizing the need to prioritize it to rebuild and thrive in the post-pandemic era. Airlines are investing in more fuel-efficient aircraft, adopting eco-friendly practices, and exploring alternative fuels to reduce their carbon footprint. This shift towards sustainability not only aligns with growing consumer demand for environmentally conscious travel options but also ensures a greener future for the aviation industry. 

Together with the aviation industry’s broader commitment to sustainability, the rise of the aviation aftermarket has emerged as a crucial player in the quest for environmental responsibility. As airlines invest in future technologies to harness related challenges, the aftermarket sector is witnessing a surge in demand for sustainable aviation solutions. 

This includes the development and integration of aftermarket modifications and upgrades aimed at enhancing the fuel efficiency and overall eco-performance of existing aircraft fleets. The collaboration between airlines and the aviation aftermarket not only addresses the imperative for sustainability but also underscores the industry’s collective effort to embrace innovative solutions, ensuring a greener and more resilient future for air travel. 

Never-ending Supply Chain Challenges? 

With countless variables affecting the current state of aviation’s supply chain, and while many uncertainties still linger, the industry is poised for a robust recovery. Of course, it is not the only industry that finds itself grappling with a series of supply chain obstacles that have been magnified by the pandemic’s impact. However, aviation is already hit more obvious than any other sector as staff shortages, scarcity of raw materials, rising inventory and labor costs, and extended lead times are among the primary bottlenecks.  

The aftermath of the pandemic has caused a backlog of aircraft orders, leading to delays in deliveries. That’s how the Airbus A321neo became the most backlogged aircraft model in the world, with 5,461 orders and followed only by the infamous Boeing 737 MAX, with 3,061 orders. 

Inflation has driven up the costs of materials and labor, adding to the strain on the supply chain. Data from various sources suggests that the global aviation industry is expected to spend over $2 trillion on materials and components in 2023.  

Complexities of Local Sourcing: A Shift Towards Global Solutions 

In response to these escalating challenges, the aviation industry is adopting strategic measures to navigate the complexities of the current economic landscape. Faced with rising costs of materials and labor due to inflationary pressures, industry leaders are proactively seeking solutions to optimize their supply chains. As part of this adaptive approach, a recent study by McKinsey & Company highlights a noteworthy trend – the aviation sector is increasingly turning to global sourcing to address the complex web of supply chain disruptions. 

Sourcing materials locally has become increasingly complex, pushing the industry toward global sourcing. A recent study by McKinsey & Company found that the aviation industry is increasingly sourcing materials from outside of its home markets. The study found that the share of materials sourced from outside of the home market is expected to increase from 50% to 70% by 2030. 

Being already around for decades, global sourcing allows manufacturers to access a wider range of suppliers and potentially lower costs, but it also introduces additional challenges such as longer lead times and increased transportation costs. Furthermore, the pandemic has further disrupted aviation supply chains, with lockdowns and restrictions impacting production and distribution worldwide. 

Rising Stars in the Aftermarket 

Global disruptions, including strikes and geopolitical conflicts, have impeded the smooth flow of goods and services. Strikes by aviation staff and pilots in Europe have led to flight cancellations, while geopolitical tensions, such as Russia’s invasion of Ukraine and COVID-19 lockdowns in China, have impacted the availability and pricing of raw materials, leading to stress in finding alternative sources. 

A standout trend in the aviation industry is the steady growth of the Used Serviceable Material (USM) Market. This upward trajectory is fueled by the need for cost-effective solutions and reduced maintenance costs. The North American market, especially the United States, plays a pivotal role in the global USM market. 

The U.S. is investing in infrastructure to support both commercial and defense applications, further driving this market. Despite challenges posed by long lead times in the MRO sector, companies are actively dedicating resources to acquiring assets and expanding their inventory to meet market demand. Experts predict a surge in the retirement of older aircraft in the coming years, creating fresh opportunities in the USM market. 

A Sustainable Approach: Aircraft Teardowns and the Supply Chain 

Despite the challenges of aviation supply chains, there are promising signs of recovery in the aviation industry. Increased production rates and growing travel demand are encouraging indicators. However, the journey back to pre-pandemic levels remains uncertain, with factors like macroeconomic conditions, inflation, geopolitical situations, and labor issues influencing the pace of recovery. While these challenges may persist for the next year or two, the industry’s resilience shines through as it seizes opportunities to support its recovery. 

During these turbulent times, there’s a glimmer of sustainability and innovation in the aviation industry, particularly through aircraft teardowns. This practice provides a constant and valuable source of high-quality, cost-effective spare parts for the aviation supply chains. It’s not just recycling; it’s about reducing, reusing, and recycling. 

The average commercial aircraft contains over 5 million individual parts. Of these, approximately 70% can be salvaged and reused through aircraft teardowns. The teardown process involves harvesting and monetizing recycled assets, with the primary goal of reintroducing aircraft components and parts into the aviation supply chains to maximize their value. High-value parts are targeted for reuse as spare parts for operational aircraft, maximizing revenue for sellers. For example, a single Airbus A320 aircraft can be worth up to $10 million in spare parts after it is retired from service. 

Environmental Gains and Sustainability Commitment 

Once parts are removed from retired aircraft, they are inspected and cataloged. Their condition is assessed for serviceability and potential resale value. If suitable, these parts undergo overhauls in dedicated facilities and are offered to the aftermarket for resale, lease, or exchange going further through aviation supply chains. 

Part-out, a specific subset of the teardown process, focuses on market demand for essential parts. Teardown, on the other hand, caters to a broader spectrum of spare parts, often making it more profitable due to the diversity of items involved. 

The global pandemic has led to an increase in aircraft being sent for teardown. However, labor shortages, part availability, and logistical challenges have contributed to slow Turnaround Times (TATs). The delayed delivery of new aircraft has kept older planes operational longer, resulting in a growing demand for used serviceable material (USM) and increased component pricing. 

Who Benefits from Teardowns 

Aircraft teardowns not only offer economic benefits but also environmental advantages. This process is a win-win for all involved, reducing waste, conserving resources, and contributing to a more sustainable aerospace industry. The industry’s commitment to sustainability is exemplified by actions like the AJW Group’s dedication to the United Nations Global Compact (UNGC) and its sustainable development goals. 

The positive impact of aircraft teardowns extends to various sectors, including MRO facilities, part traders, lessors, aircraft manufacturers, and the local economy. The teardown process involves multiple stages, from initial assessment to hazardous material management, ensuring efficiency and environmental protection. 

The aviation industry has proven its mettle in the face of substantial challenges, and with a focus on sustainability and innovation, it’s poised for recovery and growth. Aircraft teardowns and the associated supply chain play a pivotal role in this transformation, offering not just economic benefits but also environmental advantages. Therefore, cooperation between stakeholders, government support, and proactive measures will be instrumental in ensuring a thriving aviation sector in the years to come. Every day offers an opportunity to strengthen and support this resilient industry, making aviation a more sustainable and promising sector for the future. 

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Overcoming the Titanium Shortage in MRO Supply Chains

2023-11-28 / 5 min

The aerospace and aviation industries have been fighting unprecedented supply chain challenges in recent years, and one of the biggest problems has been the shortage of titanium. This shortage has sent a significant shockwave through the MRO sector, creating a dire need for agile supply chain solutions to counteract the impact. Toma Matutyte, CEO of, shares insights on the reasons behind the titanium shortage, the consequences it has brought, and the potential solutions that MROs must adopt to navigate this challenging landscape.

To understand the titanium shortage, it is essential to recognize Ukraine’s historical significance as one of the largest producers of titanium in the world. Ukraine’s rich titanium resources, particularly the deposits located in the Zaporizhia region, have played a crucial role in global supply. However, the annexation of Crimea by Russia and the war in Ukraine have disrupted this supply chain.

While Ukraine itself does not manufacture metallic titanium or its finished products, the country exports titanium concentrates, which are subsequently processed and utilized in various nations. Throughout the conflict, the Ukrainian state-owned United Mining and Chemical Company (UMCC Titanium) managed to export a substantial 82.2 thousand tons of titanium-containing ores between July 2022 and April 2023. Reports from KyivPost and other investigations carried out by Ukrainian and Western media outlined that a notable portion of these shipments ultimately reached Russia.

The Role of Ukraine in Titanium Production

The world’s most significant titanium producer, the Russian VSMPO-Avisma Corporation, has historically depended on Ukrainian raw materials and continues to do so. Investigators have raised alarms, as VSMPO-Avisma’s products are widely used in global aerospace production.

Russia was a significant supplier of titanium to both Boeing and Airbus before the war. Boeing even had established a joint venture with VSMPO-AVISMA, a part of Rostec, a Russian government-owned industrial and defense conglomerate. As recently as November 2021, just three months before the war began, Boeing and VSMPO-AVISMA had extended and expanded their collaboration, with approximately one-third of Boeing’s titanium coming from Russia.

In Airbus’s case, their reliance on Russian titanium supplies was even more substantial. While they didn’t have a joint venture like Boeing, it’s estimated that they sourced about half of their required titanium from Russia. However, the war has brought about a significant change.

To illustrate the gravity of the titanium shortage issue, according to KPMG’s Aerospace & Defence Outlook 2023, titanium shortages have been identified as one of the top supply chain concerns in the aerospace industry. The Oliver Wyman Global Fleet and MRO Market Forecast Update 2022 report highlighted that the demand for titanium in aviation is expected to grow steadily, with no signs of slowing down.

Meanwhile, AviationPros reported that US aviation supply chain challenges, including parts shortages and rising costs, are partly attributed to the titanium shortage. Ukraine’s titanium production has been severely impacted by the Russian invasion leading to a decline in exports and a tightening of global titanium supply.

This disruption has had far-reaching consequences, as titanium is a vital material in aerospace manufacturing, known for its exceptional strength-to-weight ratio, corrosion resistance, and high-temperature stability. As CFRP (Carbon Fiber Reinforced Plastic) is becoming more widely used in the production of airframe and engine components, global demand for titanium used in aerospace manufacturing is also rising as the metal is perfectly compatible with CFRP when it comes to coefficient of thermal expansion and even corrosiveness.

The Problem That Continues to Extend Worldwide

In addition to airframe components, titanium alloys find application in modern aircraft engines, including turbofan motors, which power the majority of the world’s most popular commercial aircraft. Titanium plays a critical role in the production of key engine components, such as the fan, compressor, combustion chamber, and turbine.

Ukraine’s titanium production has decreased significantly, contributing to a global titanium production decrease of approximately 12% over the last five years, as per the Oliver Wyman Global Fleet and MRO Market Forecast Update 2022. The shortage has led to a sharp increase in titanium prices. AviationPros puts down that rising costs are one of the factors pressuring the aviation supply chain, with titanium being a major contributor to these cost escalations.

Numerous indicators suggest that the biggest aerospace manufacturers, like Boeing, Airbus or Embraer were making earnest efforts to reduce its reliance on Russian suppliers ever since the invasion began and even before the majority of Western sanctions on Russian exports were applied. Nonetheless, as challenging as it was already, additional issues were piling up ever since. While Russia stands as the world’s third-largest titanium producer, lagging behind China and Japan in terms of material output, it had held the position of the primary supplier of aerospace-grade titanium, contributing to half of the world’s aerospace titanium prior to 2022.

Various strategies are being considered to address this issue. One possible solution is to procure titanium from China, which overtook Russia as the world’s foremost titanium producer many years ago. However, this approach still presents challenges, as China’s titanium production is steadily increasing, and it would essentially shift the West’s titanium dependency to another nation.

The shortage has resulted in delays and disruptions in the production of critical aerospace components, impacting aircraft manufacturing and maintenance schedules. ‘MROs are experiencing resource crunches, with access to sufficient titanium materials becoming increasingly difficult. This directly affects their ability to repair and maintain aircraft.

Agile Supply Chain Management As Solutions for MROs

In the face of these challenges, MROs must adopt agile supply chain strategies to mitigate the impact of titanium shortages’ – explains Matutytė. Acknowledging the current state of the MRO industry, outlines the following strategies to offset supply chain risk in MRO.

  1. Diversify Suppliers: Reduce dependence on a single source of afterparts by diversifying suppliers and exploring alternative sources. Collaboration with global suppliers is vital to ensure a stable supply of titanium parts.
  2. Strategic Stockpiling: Maintain strategic stockpiles of critical titanium compounded materials and parts, to buffer against supply disruptions. This ensures a consistent flow of materials even during shortages.
  3. Advanced Forecasting: Utilize advanced forecasting tools and data analytics to predict and plan for material shortages, enabling proactive responses rather than reactive measures.
  4. Technology Adoption: Embrace innovative technologies, such as 3D printing and advanced composite materials, as potential substitutes for titanium in certain applications, reducing dependency on traditional materials.
  5. Collaborative Partnerships: Foster collaborative partnerships within the aerospace and aviation industry to collectively address supply chain challenges and share best practices.

The titanium shortage, exacerbated by disruptions in Ukraine’s production, has presented a formidable challenge to the MRO sector and the broader aerospace and aviation industries. As highlighted by key statistics, the consequences of this shortage are far-reaching, impacting production, costs, and resource availability. as part of the Avia Solutions Group family, the world’s largest ACMI (Aircraft, Crew, Maintenance, and Insurance) provider will continue to deliver solutions in the competitive aviation aftermarket landscape. To navigate this turbulent landscape, MROs must be agile in their supply chain management. Diversifying suppliers, stockpiling critical materials, and embracing innovative technologies are essential steps toward ensuring resilience in the face of ongoing titanium shortages. Collaborative efforts within the industry will play a pivotal role in finding sustainable solutions to this supply chain crisis. By doing so, the aviation industry can continue to soar, even in the face of titanium scarcity.

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Unveiling the AOG Technics Scandal: Implications for the Aircraft MRO Industry

2023-11-22 / 3 min

In a recent revelation that has reverberated across the aviation industry, the Federal Aviation Administration (FAA) issued an Unapproved Parts Notification (UPN) on September 21, 2023, highlighting a critical bushing part supplied by AOG Technics. The crux of the matter? This part lacked the essential FAA production approval, and associated documents were found to be “falsified.”

AOG Technics, known for its involvement in the aerospace spare parts industry, had supplied these questionable parts, raising concerns about the safety and the authenticity of components used in the aviation sector. Airplane parts suppliers and, especially, marketplaces for aerospace parts and supplies, play a crucial role in supporting the MRO sector, airplane operators, and the whole aviation industry in an unforeseen situation like such explains Toma Matutyte, CEO of

TAP Air Portugal, one of the mayor European flag carriers, was first to raise the alarm early this Summer. They have discovered that some parts, namely, engine bushings, installed on CFM56 engines, were worn out significantly, despite having been documented as completely new. This led to the discovery of false documentation for the parts supplied by AOG Technics.

How The AOG Technics Scandal Unfolded

UK-based broker AOG Technics, a name that might have gone unnoticed in the vast realm of aerospace suppliers ever since the company was founded back in 2015, suddenly found itself in the spotlight. The FAA’s UPN demanded immediate action: the removal and quarantine of uncertified bushings to prevent their installation until their eligibility could be verified.

After the London High Court issued a ruling, instructing AOG Technics to provide the record of its transactions with supplier and to giving more details on any CFM56 and CF6 parts it has sold along with the documentation for such parts, the company has gone completely silent.

These parts had been used in CFM56 engines, a workhorse of aviation, frequently seen in older-generation Airbus SE A320 and Boeing 737 aircraft.

The CFM56 engine, manufactured by CFM International, has long held the title of the world’s best-selling aircraft engine. The ripple effect of this scandal is undeniable, but what does it signify for the MRO industry?

Implications for the Aircraft MRO Industry

The MRO industry’s ability to respond effectively will determine its resilience and continued trustworthiness in the eyes of airlines and passengers. There probably will be several implications, as the aviation MRO sector is poised for increased regulatory scrutiny and stricter compliance measures. Moreover, there could also be a quality assurance reassessment as MRO facilities will need to revisit their procedures and quality control principles. This leads further to the issue of the security of supply chains as MRO companies will need to collaborate with trusted suppliers and enhance supply chain transparency to prevent counterfeit parts from infiltrating the system.

Also, do not forget that reputation is everything in the MRO industry. MRO companies may need to rebuild or reinforce their reputation, demonstrating their commitment to safety, quality, and compliance. Yet, those market players that adapt swiftly and demonstrate their commitment to safety and quality may find new business opportunities. Airlines and regulators will be seeking reliable partners in the MRO sector who can provide the highest levels of assurance and compliance.

The reminder of importance of reliable airplane parts suppliers and marketplaces

The AOG Technics scandal serves as a stark reminder of the critical role that MRO companies play in maintaining the safety and reliability of the aviation industry. While these developments present immediate challenges, they also offer opportunities for innovation and growth for MRO companies that can adapt to the evolving landscape of aviation safety and compliance.

The short-term implication, which is already manifesting itself, and is about to undoubtedly have further impact on the future of the whole sector, is the growing need for a timely supply of critical parts for the affected airplanes which are crucial to keep them flying.

As the aviation industry embarks on this journey of introspection and reform, the MRO sector will stand at the forefront of ensuring that aircraft continue to fly safely and reliably. The implications of the AOG Technics scandal may have a scope big enough to reshape the MRO industry, with an enduring commitment to safety and mutual trust among the business partners within the sector.

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MRO Forecast for 9,000 shop visits and engine overhauls in 2024

2023-11-15 / 2 min

Following the MRO forecast that 9,000 shop visits and engine overhauls are expected in 2024, the aviation sector gears up for an era of extended asset life.

In a changing aviation landscape demand has consistently outpaced production, CEO, Toma Matutyte, notes, “Our data suggests that the drive for lean MRO will continue across an extended and agile aftermarket. As aircraft retirements are pushed out and demand outpaces production, the total forecasted quantity remains unchanged. The average age of aircraft in service is 12 years, with an average forecasted retirement age of 22 years. This industry shift underscores the paramount importance of agile asset management. The forecasts predict a staggering increase in shop visits and engine overhauls for 2024, necessitating the strategic application of technology to meet this burgeoning demand.”

The significance of efficient MRO in asset management is further highlighted by the surge in overhauls anticipated, according to the most recent MRO forecast.  Approximately 7,686 engine overhauls are anticipated globally in 2023, and even greater numbers are projected for 2024 and 2025, totaling 8,837 and 8,995 shop visits, respectively. Engine MRO is expected to be worth $39.3 billion in 2023, or 45% of the entire commercial aftermarket. Global engine shop visits are still below pre-COVID-19 levels despite attempts to increase capacity, with the industry seeking to reach pre-pandemic levels by the second half of 2024. The engine MRO supply chain has seen ongoing difficulties, such as OEM manufacturing limitations, protracted lead times, and material shortages made worse by international events. The aftermarket will need to increase both efficiency and cost containment to meet demand into 2024 and 2025.

The aviation industry is at a pivotal juncture where the total cost of ownership value proposition for customers must be elevated through lean and cost-effective MRO solutions. The extended life of aircraft in service presents a formidable challenge and an extraordinary opportunity in the aftermarket segment. According to CEO, Toma Matutyte, “As operators grapple with the reality of extending aircraft service beyond traditional retirement ages, agile asset management becomes the linchpin for success.”

Leading MRO practice leverages advanced technology and a global network of suppliers to streamline supply chains, optimize inventory management, and ensure minimal downtime by embracing lean principles and cutting-edge data analytics, extending asset life while reducing operational costs. “This is where the MRO sector will need to be to win capacity and meet demand” – CEO, Toma Matutyte.

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