The repair and overhaul of engines has swelled from a $31 billion business before the pandemic to $58 billion this year, according to Alton Aviation Consultancy. It's a cash cow for engine makers like"We just have one customer and that's American Airlines doing our work," American's chief operating officer, David Seymour, said."We can control our own destiny in that area.
Meanwhile, Airbus and Boeing are behind on deliveries of new, more fuel-efficient airplanes, forcing carriers, including American, to hold on to older jetliners longer than they planned."I would also call it the surprise factor for 2024," Airbus CFO Thomas Toepfer said on a July 30 earnings call.after a door panel blew out from one of its 737 Max planes midair at the start of the year.
But key parts are hard to find and they must be flawless. Plus, they're costly. The dozens of engine compressor blades can go for $30,000 a pop. The Riga, Latvia-based carrier, an Airbus A220 customer, had to lease planes in recent years to make up for its grounded jets. "When it comes to engines, it's a razor-razor blade business," said Michaels, describing how buying shavers in a drug store can mean repeat business for replacement blades for years."So the money is made in the aftermarket on the engine business."For many airlines, there aren't many alternatives to costly engine overhauls with demand on the rise for replacement engines, especially if the carrier has one type of aircraft or a model that only has one supplier.