GE Aerospace Predicts Continued Supply Chain Challenges into Next Year
GE Aerospace executive Russel Stokes indicated that global supply chain issues are expected to persist through next year, despite a slowdown in Boeing’s aircraft production. Speaking at an industry event, Stokes, who leads GE Aerospace’s commercial engines and services, emphasized that while the company is aligned with Boeing’s production rates for this year, efforts are underway to boost production capacity in the coming years.
Stokes expressed confidence that conditions will improve over time, stating, “But…it’s still a challenged environment for this year and probably next year.” GE Aerospace, in partnership with France’s Safran through their CFM joint venture, co-produces the engines for Boeing and Airbus narrow-body jets, including the 737 MAX family, making it a crucial supplier in the commercial aerospace sector.
Boeing’s production slowdown, triggered by increased regulatory scrutiny following an incident in January where a door plug detached from an Alaska Airlines jet mid-flight, has led to a significant reduction in LEAP engine production forecasts for the year. While this slowdown might provide some relief to the strained supply chain, it also risks exacerbating the existing challenges.
Larry Culp, CEO of GE Aerospace, has previously linked these supply chain issues to the COVID-19 pandemic, which drastically reduced air travel demand and led to widespread layoffs across the aviation industry. These disruptions have not only hampered jet production increases but also extended turnaround times at jet engine repair facilities, with some airline CEOs citing engine repair delays as a significant industry constraint.
As a newly independent entity, GE Aerospace holds a substantial share of the narrow-body jet engine market and a strong presence in wide-body engines, with over 70% of its commercial engine revenue derived from parts and services. Stokes highlighted that both the company’s equipment and services divisions are facing material availability challenges.
To address these issues, GE Aerospace has stationed 500 engineers at various supplier and sub-supplier locations and is leveraging artificial intelligence to mitigate bottlenecks. Additionally, the company plans to implement technology used for detecting forged artwork to identify chemical anomalies in metal parts, aiming to reduce turnaround times at its repair shops by 30% compared to the previous year.
Stokes assured that GE Aerospace is committed to supporting airlines’ demands for more engines to enhance their fleets. “We’re doing everything that we can in support of that,” he stated, underscoring the company’s proactive approach to overcoming the ongoing supply chain hurdles.