In Tulsa, Oklahoma, aircraft engine shops around the world are overflowing due to parts and labor shortages, delayed deliveries from Boeing and Airbus, an engine recall, and premature repairs. As travelers boarded planes in record numbers this summer, airline executives anxiously awaited engine repairs and overhauls. The repair and overhaul of engines has grown from a $31 billion business to $58 billion this year, benefiting engine makers like GE Aerospace, Pratt & Whitney, and Rolls-Royce.
American Airlines’ solution is to do more of the work itself. At its engine shop in Tulsa, American plans to increase overhauls by 60% this year, working on CFM56 engines that power older Boeing 737s and many Airbus A320s. The bottleneck in engine repairs is mostly due to airlines delaying maintenance during the pandemic and facing worker shortages and shortages of key items. Airbus and Boeing delays in delivering new planes have also contributed to the bottleneck.
With many engines needing overhauls every 7,000 flights, keeping older airplanes longer means more routine maintenance, adding to demand. At American’s shop in Tulsa, workers remove hundreds of parts, replace components, and inspect others thoroughly. Key parts are hard to find, must be flawless, and are costly. Some newer engines are entering shops earlier than expected, frustrating airline CEOs. A Pratt & Whitney engine recall is also causing further delays in engine shops. Some low-cost airlines, such as JetBlue Airways and Spirit Airlines, are postponing new jet deliveries to save money due to ongoing issues. According to Michaels from AeroDynamic Advisory, the engine supply chain has been significantly affected.
The demand for engine overhauls has been profitable for engine suppliers, generating billions in revenue from maintaining engines sold with new airplanes. GE Aerospace made $11.7 billion from engine maintenance in the first half of 2024, accounting for 65% of its revenue. Michaels described the engine business as a razor-razor blade model, where the aftermarket is where the money is made.
GE Aerospace, which became an independent company in April, announced a $1 billion investment to upgrade its engine shops globally over the next five years.
Many airlines face limited options for costly engine overhauls due to rising demand for replacement engines, especially if they use a specific aircraft type or model from a single supplier. Rental rates for engines compatible with old and new planes have surged, with leasing firms like AerCap and Avolon acquiring spare engines due to high demand. Delta Air Lines and American Airlines conduct their own engine maintenance and repairs, with Delta’s CEO Ed Bastian stating in July that the shop is at full capacity, comparing entry to a Taylor Swift concert.