Airbus CEO Remains Worried About Engines Despite Improving Aerospace Supply Chain: A Comprehensive Analysis of Industry Bottlenecks and Recovery Strategies

The aerospace industry in 2025 finds itself at a critical juncture where robust demand for commercial aircraft is met with persistent supply chain constraints, most notably in engine manufacturing. Airbus CEO Guillaume Faury, speaking at the U.S. Chamber of Commerce Global Aerospace Summit in Washington, D.C., highlighted that while overall supply chain performance has improved since 2023, engine shortages remain the principal obstacle to meeting ambitious delivery targets. Despite most suppliers now meeting schedules, Airbus faces a backlog of roughly 60 completed aircraft, so-called “gliders”, awaiting engine installation each month, underscoring the systemic nature of the engine supply challenge.

This bottleneck is not an isolated issue but reflects broader vulnerabilities in an industry that supports 1.6 million U.S. jobs and contributes over $545 billion in annual economic output. The cascading effect of engine shortages impacts airlines, lessors, and the entire aerospace ecosystem, making the crisis in engine supply a defining issue for the sector’s near- and medium-term outlook.

Background Information and Historical Context

The commercial aircraft engine market is highly concentrated, with CFM International, jointly owned by GE Aerospace and Safran, controlling 39 percent of global market share as of late 2019. This oligopolistic structure means that disruptions at a single manufacturer can have outsized effects throughout the sector. The COVID-19 pandemic exacerbated these vulnerabilities, as demand for air travel collapsed and then rebounded faster than suppliers could restore production capacity.

Engine manufacturing is uniquely complex compared to other aerospace components. Modern engines contain thousands of precisely engineered parts, many of which require specialized production facilities and highly skilled labor. Manufacturing cycles for critical components, such as turbine blades, can take several months, making rapid scaling difficult. The transition to next-generation engines, like CFM’s LEAP series, has brought new technical and production challenges, including durability optimization and scaling output to match surging demand.

Boeing and Airbus have long relied on globalized supply chains optimized for efficiency. While this approach lowered costs and facilitated rapid growth in stable times, it also introduced fragility. Simultaneous disruptions across multiple suppliers and regions, such as those seen during the pandemic and the 737 MAX grounding, have demonstrated the risks inherent in this model.

Historical Precedents and Lessons Learned

The current engine crisis is not the first time the aerospace sector has faced such constraints, but the convergence of pandemic recovery, technological shifts, and geopolitical tensions makes it unique. Previous crises, such as the Boeing 737 MAX grounding, highlighted the importance of maintaining supplier relationships and production flexibility. The lessons learned from these events are now informing industry strategies for resilience and recovery.

Strategic partnerships, such as the long-standing CFM International joint venture, have enabled technological advancements and market dominance, but also create dependencies that can amplify the impact of production disruptions. As the industry moves toward more sustainable and technologically advanced propulsion systems, the need for robust, flexible supply chains has become increasingly clear.

Ultimately, the historical context underscores the need for a balance between efficiency and resilience, a theme that is now central to the industry’s response to ongoing challenges.

“The engine manufacturers are the most challenging part of the supply chain today,” Airbus CEO Guillaume Faury told aerospace executives in Washington, D.C., highlighting the sector’s ongoing vulnerability.

Current Engine Supply Chain Challenges and Technical Issues

Airbus’s delivery ambitions, targeting 820 aircraft in 2025, are hampered primarily by engine shortages. The company has reported a monthly average of 60 completed aircraft awaiting engines, resulting in significant inventory and financial strain. In the first half of 2025, Airbus reported a €1.6 billion cash outflow, much of it tied to work-in-progress aircraft stuck in limbo due to engine delays.

CFM International, which supplies the LEAP engine for both Airbus A320neo and Boeing 737 MAX aircraft, faces acute production and durability challenges. Although the company aimed to increase LEAP engine output by up to 20 percent in 2025, supply chain disruptions and technical issues have limited actual growth. Early LEAP models have suffered from premature wear, especially in harsh environments, leading to increased maintenance needs and reduced operational availability. CFM is rolling out upgrades, including new turbine blades and system fixes, but these require time to certify and implement across the installed fleet.

Pratt & Whitney’s PW1100G geared turbofan, another key engine for the A320neo, is grappling with even more severe reliability issues. Contaminated powdered metal used in manufacturing has necessitated extensive inspections and repairs for thousands of engines, with some shop visits taking nearly a year. The result: hundreds of aircraft remain grounded, and the ripple effects are felt by airlines and lessors worldwide.

Maintenance, Repair, and Overhaul (MRO) Bottlenecks

The MRO sector is under intense pressure as airlines and lessors scramble to keep fleets operational. Maintenance facilities are at capacity, and shortages of both new components and used serviceable material further constrain engine availability. Labor shortages compound these problems, creating bottlenecks that extend turnaround times and increase costs for operators.

Engine manufacturers are responding by ramping up spares production and introducing upgrade packages. For example, Pratt & Whitney’s “GTF Advantage” program aims to double engine time on wing and reduce operating temperatures, while CFM is deploying durability enhancements for its LEAP engines. However, these solutions provide only gradual relief, as retrofitting and certification processes are inherently time-consuming.

In the interim, airlines are forced to extend leases, defer new aircraft deliveries, and absorb higher maintenance costs. In extreme cases, such as India’s GoFirst, engine shortages have contributed to bankruptcy filings, highlighting the existential risk posed by prolonged supply chain disruptions.

“The maintenance, repair, and overhaul sector is hitting maximum capacity on shop visit slots, while also encountering issues sourcing new components and labor,” notes IBA’s engine market analysis, illustrating the multifaceted nature of the crisis.

Financial and Market Impact Analysis

The financial impact of the engine supply crisis is significant and widespread. Airbus’s €1.6 billion cash outflow in early 2025 is directly tied to production-delivery mismatches. Delays in aircraft handovers mean delayed revenue recognition and strained customer relationships. Engine shortages also inflate lease rates and asset values for serviceable engines, benefiting lessors but increasing costs for airlines.

The global aerospace market, valued at $356.11 billion in 2024, is projected to reach $664 billion by 2033. However, engine supply constraints threaten to limit this growth by capping aircraft delivery rates and raising operational costs. Similarly, the broader aerospace and defense market, estimated at $846.94 billion in 2025, faces growth limitations due to persistent supply chain issues.

Engine manufacturers, particularly GE Aerospace and Safran, have seen strong financial performance despite the crisis. GE Aerospace reported a $2 billion quarterly profit and a record $175 billion backlog, with commercial engine revenue up 30 percent year-on-year. Safran’s three-year net profit margin increased by 246 percent, demonstrating the profitability of engine manufacturing even amid supply constraints.

Airline and Economic Impact

Airlines bear the brunt of engine shortages through delayed fleet expansion, higher maintenance costs, and operational disruptions. Some carriers have faced bankruptcy due to their inability to secure airworthy engines for their fleets. The broader economic impact is also substantial: the U.S. aerospace industry supports 1.6 million jobs and contributed $284.1 billion to GDP in 2023. Prolonged supply constraints could suppress employment and economic growth in aviation-dependent regions.

Meanwhile, engine lessors benefit from higher lease rates and asset values, creating a paradox where some industry participants profit from the very shortages that threaten others.

These financial dynamics underscore the interconnectedness of the aerospace value chain, where disruptions at a single node, engine manufacturing, can ripple across the entire industry.

“GE Aerospace now expects $8.2-8.5 billion in 2025 operating profit, up from previous estimates, and forecasts commercial engine services revenue will double to $20 billion by 2030,” according to Flight Global’s financial analysis.

Industry Response and Technological Solutions

The aerospace sector is deploying a range of strategies to address engine supply constraints. Airbus has adjusted production scheduling, backloading deliveries to the second half of the year when engine availability is expected to improve. The company continues to produce at full capacity, accepting the financial cost of storing completed but undelivered aircraft as a necessary trade-off to maintain supplier relationships and production efficiency.

Engine manufacturers are investing in both immediate fixes and long-term upgrades. CFM is rolling out durability enhancements for its LEAP engines, while Pratt & Whitney’s GTF Advantage and HS+ retrofit packages aim to address current reliability issues and future performance needs. These upgrades include advanced materials, improved cooling, and optimized hot sections designed to extend engine life and reduce maintenance frequency.

Supply chain diversification is now a strategic imperative. Boeing’s experience with the 737 MAX grounding led to a comprehensive restructuring of supplier relationships and inventory management. Both Airbus and Boeing are investing in digital supply chain platforms to improve visibility, coordination, and flexibility across their global networks.

Technological Innovation and Future Strategies

Advanced manufacturing technologies, such as additive manufacturing (3D printing), are being adopted to reduce lead times and dependency on traditional bottlenecks. Digital transformation initiatives leverage artificial intelligence and machine learning to optimize production scheduling, predictive maintenance, and quality control.

Material science advancements, such as composite and ceramic matrix components, enable higher operating temperatures and improved fuel efficiency. These innovations are central to both current engine upgrades and the development of next-generation propulsion systems.

Collaborative industry projects, like the RISE program by GE Aerospace and Safran, aim to develop revolutionary sustainable aviation technologies, including open fan architectures and hybrid-electric systems. These efforts reflect a recognition that systemic challenges require coordinated, long-term solutions involving multiple stakeholders across the value chain.

“The RISE program aims to deliver 20 percent improved fuel efficiency through revolutionary propulsion technologies,” according to GE Aerospace and Safran’s joint development announcement.

Global Market Context and Competitive Dynamics

The engine supply crisis unfolds against a backdrop of record demand for commercial-aircraft, with global passenger traffic expected to double over the next two decades. Both Boeing and Airbus reported record order backlogs in 2024, projecting combined single-aisle aircraft production rates that could exceed 130 units per month. However, these targets are contingent on resolving engine supply bottlenecks.

The competitive landscape in engine manufacturing is marked by high barriers to entry and technological complexity. CFM International, Pratt & Whitney, Rolls-Royce, and General Electric Aviation together control 99 percent of the global market. This concentration amplifies the impact of disruptions at any one supplier and makes recovery a collective challenge for the industry.

Geopolitical tensions and trade policy uncertainties add further complexity. U.S. export restrictions, such as those affecting CFM engine deliveries to China, illustrate how political factors can disrupt established supply relationships. Sustainability requirements are also reshaping competition, with investment in fuel-efficient and alternative propulsion technologies becoming a key differentiator.

Conclusion and Future Outlook

The engine supply crisis of 2025 has exposed both the strengths and vulnerabilities of the global aerospace industry. While Airbus and other manufacturers have demonstrated resilience and adaptability, the concentration of engine manufacturing among a few suppliers remains a structural risk. The financial and operational impacts of engine shortages ripple across the entire value chain, from manufacturers to airlines and the broader economy.

Looking ahead, technological innovation, supply chain diversification, and collaborative industry initiatives will be critical to resolving current constraints and positioning the sector for sustained growth. The lessons learned from this crisis are likely to accelerate the adoption of digital, automated, and sustainable practices, laying the groundwork for a more resilient and competitive aerospace industry in the years to come.

FAQ

Why are engines the main bottleneck in aircraft deliveries?
Engine manufacturing is highly complex and concentrated among a few suppliers. Recent technical and production challenges, particularly with CFM LEAP and Pratt & Whitney PW1100G engines, have led to shortages and delayed aircraft deliveries.

How has Airbus responded to the engine supply crisis?
Airbus continues to produce aircraft at full capacity and stores completed airframes awaiting engines. The company has adjusted delivery schedules and enhanced planning to accommodate engine delivery uncertainties.

What are engine manufacturers doing to address these challenges?
CFM International and Pratt & Whitney are rolling out technical upgrades and durability enhancements for their engines. They are also ramping up spares production and investing in new materials and predictive maintenance technologies.

What is the broader economic impact of the engine supply crisis?
The crisis affects airlines, lessors, and the wider economy, with potential to suppress employment and economic growth in aviation-dependent regions. Delayed deliveries and increased costs ripple across the entire aerospace value chain.

What long-term solutions are being developed?
The industry is investing in advanced manufacturing, digital supply chain management, and sustainable propulsion technologies, such as those being developed under the RISE program by GE Aerospace and Safran.

Sources

• Reuters / US News