Supply chain, labor issues still hampering private jet industry

Supply chain shortages of raw materials for windshields and engine parts are slowing private jet makers and flight providers.

By Doug Gollan, October 19, 2023

A report from the National Business Aviation Association conference by the financial analysts at Jefferies concludes that private jet makers and flight providers still struggle with the Covid hangover supply chain and labor issues.

In fact, “supply chain” was mentioned 22 times in the analysis.

Flight providers have seen delays in deliveries by six months, according to various executives.

Higher utilization has moved up scheduled maintenance needs.

It is also slowing the ability of OEMs to respond to market demand.

The feedback is a continuation of what industry executives reported during EBACE in Geneva in May.

Jefferies noted despite demand, “supply chain issues to keep deliveries (of new private jets) at bay.”

“Supply chain issues are still a challenge with the industry playing whack-a-mole to its bespoke product suite. Windshields are now a shortage, while last year, the issue was actuation systems. Honda anticipates flat deliveries in 2024 vs 2023 due to these issues,” according to Jefferies.

Their 9,000-word report is from more than a dozen meetings with top executives.

It notes, “Textron (maker of Citation business jets) noted similar supply chain challenges; however, they are manageable.”

Bombardier cited “labor shortages for its service unit and its anticipation of deliveries growing from 138 in 2023 to 150 in 2025, which suggests only modest growth.”

Production challenges

About Honda Aircraft Company, Jefferies said, “Delivery target for 2024 is in the 30-unit range as such flat to 2023 levels as management is not looking to increase production until it has a better grip on supply chain.”

In another of its nearly two dozen references to this pair of dirty words, Jefferies said, “Honda Aircraft is focused on the health of the supply chain given it has impacted production across OEMs.”

Specifically, “Sub-tier suppliers are the biggest risk in raw material segments. Windshield came up again, unprompted.”

If you want to say Covid was over long ago, Jefferies notes, “Within biz av, the supply chain crumbled, with more than 1,000 suppliers out of business during Covid.”

In some cases, “a broad number of parts available from OEMs to support fleet maintenance commitments, which is simply unavailable today.”

The bottom line: “Supply chain challenges continue to enforce production rate discipline.”

It also casts doubt on growth forecasts, say the analysts.

“Cirium is forecasting 8-9% growth in new deliveries for next year, which is believed to be somewhat liberal given supply chain constraints. It remains to be seen when this issue will resolve,” Jefferies said.

One flight provider executive tells Private Jet Card Comparisons, “We’re still struggling. The percentage of our airplanes that are not flying is higher than it should be.”

Flight providers, including NetJets, Flexjet, Vista Global, Wheels Up, FlyExclusive, and PlaneSense, have all been expanding parts supplies and MRO facilities to support their guaranteed flight programs.

Still, current research shows that 45.5% of subscribers have experienced delays, cancelations, and service issues over the past year.

That’s slightly up from 43.9% in 2022 to 21.1% in 2021.

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