Supply shortages cause backlogs in aircraft construction

A McKinsey study shows that production is lagging behind incoming orders by 15,700 aircraft. This is the largest backlog in the past 15 years; according to McKinsey, clearing it would take 13 years—at least if one assumes the delivery rates of 2023 and the aviation sector does not address modern supply chains for commodities and components.

In December of last year, demand for flight operations had risen back to 97% of pre-pandemic levels. Furthermore, the International Air Transport Association (IATA) expects an annual increase in demand of 5% to 10%. It is therefore a major problem that suppliers have been unable to procure sufficient quantities of raw materials, semiconductors, parts required for aircraft construction, and electronic components since 2020. In the study, McKinsey therefore urgently advises developing a system to track and optimize supply chains.

Manufacturers of aircraft and their components require a whole range of scarce metals. To withstand the temperatures of around 2,200°C generated in turbines, turbines consist of heat-resistant alloys containing rhenium or hafnium. Catalyst manufacturers use ruthenium. And the electronics of the many computers and measuring instruments contain gallium, indium, germanium, and rare earths. The latter are also found in the electric motors responsible for flaps and control surfaces. They are also used in cabin fluorescent lamps as well as displays and sensors.

Many Western states are currently striving for more independent supply chains for these commodities. This is creating a completely new ecosystem for commodity procurement, where ESG criteria are also crucial. Bringing transparency to one’s own supply chains is the right step for this reason as well: those who track their supply chains not only ensure reliable partners for the supply of commodities but can also better comply with the Supply Chain Due Diligence Act and thus avoid potential penalties. Commodity traders affiliated with Finomet, such as Noble Elements, use blockchain technology to track the path of their commodities from the mine to the ingot. The aviation industry could definitely benefit from this.