The supply chain and labor issues are keeping aircraft production levels in check, according to Ron Epstein, a managing director with Bank of America Merrill Lynch Global Research. Speaking in a panel last week at the JetNet iQ summit in New York City, he noted that the situation is not just limited to business aviation. “It’s not just this industry; the entire aerospace and defense industry is constrained,” he said. “You have an industry that is constrained from a labor point of view and you’ve got multiple constraints in the supply chain, so I guess the good news is nobody can overproduce.”
Epstein added that the paradigm is leading to stability in pricing since manufacturers don’t have to worry about one rogue airframer being able to step up production and lower prices. He believes that as a result, the OEMs are currently underproducing versus demand, which is also helping buoy prices.
One of the bottlenecks in the supply chain is engines, and Frank Moesta, senior v-p of strategy and future programs with Rolls-Royce Deutschland, noted that his company is also experiencing headwinds that are preventing it from greatly ramping up production. “For us in Germany, it’s not necessarily labor. We have got the mechanics, we have got the equipment, it’s just when you can’t get parts you can’t build engines.”
The labor crunch is being felt by the entire aviation ecosystem, said Jo Damato, NBAA’s senior v-p for education, training, and workforce development. She cited the just-released Boeing Outlook for 2024, which sees demand for more than 700,000 pilots and 900,000 technicians over the next two decades. “We’re all competing for those resources, and the best thing we can do is a concerted effort to attract them and show them why aviation as a whole is a good decision for a career investment, and then what do we need to do in business aviation to get that funnel from a very wide net to engage them about what we have to offer.”
She noted that commercial pilot pay scales are publicly available, making it easy for pilots to calculate their potential worth in terms of compensation. “If you are mid-career and comparing what you think your compensation package looks like in business aviation to [Part 121], it just might be part of the conversation.” NBAA released its own compensation survey earlier this month, which showed that business aviation salaries were up by 10%. “We can compete on some other things as well,” said Damato. “It’s also work/life balance and it’s the culture piece. If there is a good employee experience and a good employee culture, then the customer service follows.”