Supply Chains Pressure The Boeing 787 Aftermarket

The Boeing 787 has served as a cornerstone for airlines seeking to optimize operating costs and expand international routes. However, supply chain shortfalls are hiking up costs, so MROs must innovate and tighten partnerships to reduce uncertainties.

After 13 years of in-service operations, the 787 program has received 1,921 orders and 1,150 deliveries as of November 2024, according to Aviation Week Network data. Despite some operational and production challenges, notably with Rolls-Royce Trent 1000 engine issues, Boeing maintains a strong orderbook for the 787.

In Hong Kong, HAECO’s 787 capabilities encompass maintenance services from transit to maintenance checks up to 47,000 flight hours, and its expertise in composite materials allows the MRO provider to conduct all types of composite inspections and repairs, including specialized painting techniques to prevent aircraft damage.

“We are also performing structural inspections such as nondestructive testing and use of advanced systems diagnostics for troubleshooting and maintaining the aircraft’s advanced avionics, electrical systems and fly-by-wire technology,” says Ben Scheidel, HAECO’s group director for airframe services.

Also in Asia, ST Engineering in Singapore offers 787 line and heavy maintenance and modifications, including wing repairs for ultraviolet radiation exposure and full aircraft painting as well as full-scale cabin design, reconfiguration and modifications. To date, ST Engineering has redelivered more than 300 787s to airlines and lessors worldwide.

ST Engineering’s 787 capabilities are spread out across various locations. Nacelle services are in Baltimore, Maryland, while Stockholm houses repair and overhaul capabilities for Trent 1000 and General Electric GEnx-1B engine thrust reversers, inlet cowls, fan cowls and exhaust nozzles.

“The 787 nacelle capabilities will be expanded to our Xiamen, China, facility in 2025 to serve our Asia-Pacific customers,” says Yip Hin Meng, executive vice president and head of aerospace MRO at ST Engineering. He says these capabilities are offered as standalone airframe, component or nacelle services or as a bundled MRO solution for 787 operators.

In Europe, AFI KLM E&M has extensive 787 capabilities across its facilities in Paris and Amsterdam, from A to C checks, GE GEnx engine repairs and overhauls, and auxiliary power unit work on the Pratt & Whitney APS5000 at its subsidiary Epcor.

Jorgen Hoogendoorn, fleet chief for the Boeing 787 at KLM Engineering & Maintenance, says his company and Air France Industries have a maintenance and pool agreement with more than 20 operators worldwide for an extensive variety of components, which are maintained and overhauled by AFI KLM E&M.

“We are one of the two biggest providers for 787 components outside of the OEM,” Hoogendoorn says.

IMPACT ON THE PARTS MARKET

Delays and issues in the supply chain, especially for the 787’s unique parts, are a recurring problem. David Kerr, head of technical procurement and supply chain at Norse Atlantic Airways, observes an extremely limited aftermarket for the 787 over the years, including the lack of availability in pooling programs run by the International Airlines Technical Pool (IATP).

“There are a few reasons for this, such as the unique and very expensive components that have no cross-compatibility with any other Boeing model,” Kerr says. This has driven many 787 operators into flight-hour agreements with various providers, he notes.

These components are not only expensive but are also limited in availability. “This is why airlines have been reluctant to place these components into the IATP pools where they become tied up,” Kerr says.

Additionally, limited repair capabilities mean operators are often restricted to just the OEM carrying out the repairs and modifications, which can be costly, Kerr says.

HAECO has also encountered supply chain challenges for 787 parts, including availability of OEM cabin parts, such as seat leather and corrosion of lavatory lower thresholds. In response, it is assessing the critical impact and collaborating with customers to mitigate delays.

“We are also intensifying our efforts in sourcing, planning and partnerships,” says Sandra Nieuwenhuijzen, HAECO’s group director of components and engine services. However, sourcing and planning will involve expanding and optimizing the repair network and actively sourcing parts for in-house repairs through HAECO’s other service divisions for component overhaul, landing gear and composite services.

Nieuwenhuijzen believes forming strategic partnerships and leveraging collaborative strengths will be crucial to enhancing MRO service offerings. For example, HAECO recently signed a partnership agreement with Boeing Global Services for the supply of OEM spares and consignment parts, which in turn supports HAECO’s global MRO services.

ST Engineering uses several strategies to address delays and supply of unique 787 parts, from access to components through its Maintenance-by-the-Hour (MBH) programs to leveraging preventative maintenance to reduce uncertainties arising from unscheduled components removal. This makes MRO operations more efficient and less susceptible to supply chain effects.

According to Hin Meng, the MBH programs have comprehensive component coverage and rotable stock worth more than $100 million. “Airlines can rely on us for component availability in the face of supply uncertainty, as we can leverage our experience and operational scale to the provision of spare requirements ahead of time,” he says.

ST Engineering also partners with OEMs to provide airlines with prompt material and repair support, and Hin Meng says this helps to minimize aircraft-on-ground (AOG) situations and maximize on-time redelivery of components to operators.

Additionally, the Singapore-based MRO benchmarks reliability statistics, highlights components with poor reliability and facilitates preventative maintenance followed by in-depth discussions to share tailored maintenance best practices with the airline engineering, line maintenance and materials teams.

“With preventative maintenance, we can reduce unscheduled component removal and maintenance and keep aircraft flying,” Hin Meng adds.

ST Engineering also uses technologies to make operations more efficient, including in-house systems that help streamline and customize complex workflows and enable digital push notifications.

AFI KLM E&M is also using predictive tools like Prognos to replace a component before it fails. “We can replace the component in scheduled ground time instead of unscheduled, which can often lead to delays or, even worse, cancelations,” Hoogendoorn says.

AFI KLM E&M is working with the OEM to improve the reliability of critical components to lower the pressure on the availability of parts. Typically, the longer a component stays on the aircraft, the less logistics are involved, which lowers maintenance costs.

Since the peak of the pandemic, Hoogendoorn has still been seeing operators and MROs struggling to get all the critical components under control. This will obviously require significant efforts from MROs, the OEM and operators. “Even the shortage of one small bolt can impact the operation of the 787 because there is no spares or surplus market yet for the aircraft,” he says.

ESCALATING AFTERMARKET COST

Troubles in the supply chain have inevitably trickled into base maintenance costs and other services, Hoogendoorn notes, especially because AFI KLM E&M is one of the largest pool providers in the 787 market.

Hoogendoorn admits that despite all efforts, some pool services have fallen short of expectations. “We had to inform our customers, including Air France and KLM, multiple times that we cannot meet our contractual commitments and could not get the requested parts on time at a requested location,” he says.

Additional frustrations stem from OEM mandates that require several of those components to be provided on an AOG basis only, he says.

Meanwhile, HAECO has observed a rise in deferred cabin defects due to spare supply issues, leading to delays in appearance-related repairs. In addition, Scheidel says inventory holding costs have increased because of the need for larger provisional order quantities. He says the price of composite materials for the 787 has also surged markedly, with increases of 10-110% compared with 2022-23 prices.

“These factors have substantially impacted the cost management of our maintenance operations,” he says.

Supply chain shortfalls inevitably lead to a rise in maintenance costs and other challenges, as experienced by the whole aviation industry. For the 787 specifically, Hin Meng at ST Engineering identifies difficulties in procuring parts as well as composite repair materials, which often have short shelf lives and incur risks of material expiry and consequent write-offs.

Independent line maintenance provider Magnetic Line has not been directly affected by 787 supply chain issues or parts repair programs, according to Managing Director Steven Williams. 

“The airlines decide which aircraft parts they would like to store at each of our stations, based upon their risk assessment for each destination, so consequently we only manage the parts they send us,” he says.

While line maintenance usually deals with smaller repairs, composite damage can require specialized tools and knowledge to inspect and repair. Williams says Magnetic Line follows instructions from the respective airline in the event of damage to the aircraft at a station, and its staff are trained according to European Union Aviation Safety Agency requirements. The company can perform the assessment based on the engineers' aircraft type training.

“This way, they can complete the initial damage assessment as per the maintenance manual,”  Williams says. “There might be instances of additional specialized training for their own engineers, but this usually pertains more to airlines.”