Story ID: 031
AIN Roundtable—Managing Supply Chain through Overheated Demand
By: Kerry Lynch
Caption: Surging demand across all sectors is unprecedented
Word Count: 1574
While the supply chain has turned a corner from the early post-Covid days, struggles remain. Driving this is unprecedented surging demand across the aerospace spectrum, from airlines to the global defense sector. AIN brought together thought leaders in the supply chain and broader market to share insights on how the industry is working to meet that demand. Here are highlights from those discussions. FDH Aero sponsored this roundtable.
The Participants	Matt Lacki—President of FDH Hardware	Žilvinas Lapinskas—CEO of FL Technics	Mike Stengel—Partner at AeroDynamic AdvisoryOn the State of the Supply ChainMatt Lacki
The supply chain is still certainly strained post-Covid, and now there’s increasing demand with increasing build rates. Many of the large OEMs have all-time-high backlogs, which is leading to all-time-high production. This leads to an all-time-high demand for the parts that we generally distribute, both on the hardware side and on the electronics side. Certainly, air travel has grown significantly post-Covid, and that obviously is putting a strain on the aftermarket. It feels like the aftermarket has recovered somewhat, but on the OEM side, there’s still a lot of shortages.
Žilvinas Lapinskas
Demand for MRO services is growing, the market is growing, and more airplanes are coming. Of course, we feel that growing demand, and it has influenced supply chain shortages, influenced our TAT [turnaround time]. On the OEM side, we still feel that they are lagging in recovering after Covid. We can find parts in the aftermarket.
Problems with the delivery of new airplanes from Boeing and Airbus, and then GTF [Geared Turbofan] engines problems from Pratt & Whitney, are also influencing [the situation].
Mike Stengel
There’s certainly no shortage of demand for new aircraft and new engines, and this is probably one of the first times in the history of the industry where we are supply-constrained rather than demand-constrained. Matt and Žilvinas mentioned the growing backlogs already—approaching a decade for a narrowbody.
Even the widebody market, which had been taking the longest to recover during Covid, had a banner year last year in terms of orders… and so now you could see the widebody market starting to show traits of what narrowbodies have shown for several years now. Backlogs are lengthening further, and the OEMs are getting into a similar situation where they can’t deliver fast enough to keep up with demand.
On BottlenecksMatt Lacki
With many parts, especially on the fastener side, it feels like they’re made on machines that are 50 years old, so the expertise required to operate those machines has been built over decades. Many of those people retired or left post-Covid, and there’s definitely a massive gap in terms of manufacturing expertise and talent.
Some of the other gaps involve certain raw materials, and then certain factories have just really struggled with certain parts—fittings come to mind.
Žilvinas Lapinskas
After Covid, I would say from 2022, there were two hot topics in the aviation industry, especially in MRO: the supply chain and the lack of manpower. In 2026, four years past, we have the same topics: supply chain and lack of engineers. The only way for us to keep and grow our business is to have more engineers. We’re trying to attract the young generation to come into the aviation maintenance business. 
Mike Stengel
As for other bottlenecks, engines are number one in our book, just with the complexity of the manufacturing. There are some critical processes, like forgings, where we still need more investment into capacity to meet future build rates. That’s on top of aftermarket requirements. We do see some positive signs, like Pratt & Whitney is investing in their Columbus, Georgia site with new forging capacity. There still needs to be more.
The other one that may surprise a lot of people is interiors on the new-build side with widebody production coming back. Widebodies tend to have more custom and bespoke interiors. Customization and bespoke are the enemies of supply chains, where you have less consistent runs. That means some deliveries of aircraft and certification of interiors have been delayed.
You hear stories about Delta taking delivery of a bunch of [Airbus] A321neos that were meant to go into a transcon fleet with a more premium configuration and new Delta One seats. They were sitting in the desert and were actually being reconfigured into a domestic configuration just so Delta could fly them. They don’t expect the new premium configuration to be certified until next year or the following year. It’s not an ideal outcome that they have to wait for those premium seats to come to the market. There have been some other examples, like A350s getting delivered with empty first-class cabins, and the airline has to retrofit them later.
On SolutionsMike Stengel
I think the OEMs and people in the higher tiers of the supply chain are slowly recognizing that it’s not the same supply chain as from 20 or 30 years ago, where they may have had their pick of the litter. All tides are rising regardless of the end market, which means suppliers deeper in the supply chain have a wider variety of options and markets to serve.
It’s almost like the higher you are on the supply chain, the more you have to be a customer of choice. They’re looking at their commercial terms like payment terms. Some are even going as far as to establish take-or-pay agreements. Traditionally, most long-term agreements in aerospace will guarantee a price and market share, but not volume. But now, a take-or-pay agreement would have a volume guarantee. You’re paid regardless of the outcome, just to secure the capacity.
Matt Lacki
There’s certainly been a flurry of [mergers and acquisitions] on the manufacturer side, especially on the fasteners part of the business. We’ve also seen some people invest in capacity, and we’ve seen new sources develop around the world—such as in India and China.
Some of the part manufacturers are increasing capacity. But you can build all the machines you want; you just don’t have the labor to keep up with them.
Žilvinas Lapinskas
We see that OEMs are building new factories, but I agree completely with Matt that it will take some time. You can build the building, you can buy the machines, but then you have to get the people, train them, and get the approval. You have to wait for the regulator to come to do the audit, as we have at our Punta Cana [facility in the Dominican Republic]. We [were] waiting for roughly five months.
These are not fast decisions, and it influences our ability to provide the service on time. As an example, we were waiting for some parts from brake producers during the high season last summer. We’re very strong in the wheels and brakes business, but we could not deliver the brakes on time to our customer, because those parts were not arriving. 
Some brakes were removed from airplanes parked because of the GTF engine problems. So, we removed the brakes and used them in the existing fleet that is flying, because the other aircraft are waiting for the engines to come back from the shop. You have to be very creative in this kind of environment.
In SumŽilvinas Lapinskas
Some of the players call the situation a perfect storm. Mature aircraft are in big demand, because newer planes are late and then these problems with these engines. It means that the mature aircraft have to fly. And sometimes, the decisions made on this don’t look logical because six years ago, the decisions would have been different. For the MRO, it’s a really good cycle.
Mike Stengel
Despite the constraints and challenges in the supply chain, I’d say overall a positive long-term outlook for the industry, whether you’re looking at commercial transport, military, or business aviation. We remain on the more optimistic side for the state of the industry and the outlook, and we just need to push through some of these bottlenecks.
Matt Lacki
There’s more demand than there is supply, and that creates a lot of interesting challenges. There’s also a lot of geopolitical challenges that have occurred in the last 18 months and other challenges, but it also creates a lot of opportunities. It’s an exciting time in the industry if you can solve problems, be flexible, and move quickly.
I think our ability to put people around the world to provide solutions around the world is unique—it fits this particular time period well. It’s certainly a challenging time; there’s nobody I talk to who doesn’t have a mountain of emails, calls, and meetings. We want to make it easier for our customers to do business in perhaps the most highly complex industry in the world. By anticipating our customers’ needs and combining our global reach with local expertise, we can turn these current industry challenges into real opportunities. It’s a very exciting time in aerospace.
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