Key Takeaways:
Airlines are returning grounded jets to service, but the financial burden of a years-long engine crisis is proving harder to unwind.
U.S. airline engine maintenance spending rose 68% from 2019 to 2025 while hours flown climbed 10%, a Reuters analysis of Transportation Department data found.
"Availability has improved sharply, but it could take 12 to 18 months to shed extra leases and related costs, only partly offset by supplier compensation," Air New Zealand Chief Executive Nikhil Ravishankar told Reuters.
Across six large U.S. airline operations, reported spending on engine labor, aircraft-engine repairs and engine materials rose about 68% between 2019 and 2025, while hours flown increased about 10%. In the first quarter, spending in those categories rose 17% from a year earlier while hours flown increased less than 2%.
The lingering bills stem from durability problems in newer engines and a Pratt & Whitney powder-metal defect that forced accelerated inspections, compounded by shortages of labor, parts and repair capacity. Delayed Boeing and Airbus deliveries are keeping older jets in service longer, and Oliver Wyman and the International Air Transport Association estimated delayed aircraft replacements added about $3.1 billion to global airline maintenance costs in 2025.
Engine problems at one point left as much as 20% of Air New Zealand's fleet unavailable, forcing it to lease extra aircraft and engines to protect its schedule. Availability has since improved, but the carrier still carries the cost of those leases.
Long shop visits force airlines to lease replacement engines. JetBlue Airways has said some Pratt engines can take 200 to 300 days to complete a shop visit. Short-term leases for some newer LEAP and PW1100G engines have exceeded $6,500 a day in completed transactions over the past year, compared with around $5,000 a day in 2022-23, according to aviation consultancy IBA.
Austin Willis, CEO of engine lessor Willis Lease Finance, told Reuters airlines needing replacement engines have often sought leases lasting around three years, while shorter contracts are frequently extended. That can leave airlines paying even after their own engines return.
A full overhaul of a CFM56-5B engine used on older Airbus A320-family jets can easily cost more than $10 million, Willis said. Delayed aircraft retirements are also tightening the supply of cheaper used engine parts, pushing up used-parts prices and leaving airlines more dependent on new parts from manufacturers.
Parts and other materials account for about 60% of the direct cost of a typical single-aisle engine overhaul, according to consultancy Oliver Wyman. Newer engines deliver fuel-efficiency gains, but overhaul bills are higher because they have fewer developed repair options and fewer used parts available, partner Sam Sargent said.
George Dimitroff, head of valuations at Ascend by Cirium, said overhaul and mandatory parts-replacement costs for newer LEAP and GTF engines, which power most Airbus A320neo- and Boeing 737 MAX-family jets, have risen about twice as much since 2019 as for older CFM56 and V2500 engines.
The squeeze has sharpened tensions between airlines and engine makers over repair costs and pricing. Asked at the International Air Transport Association annual meeting in June whether engine makers had too much pricing power and were using shortages to charge airlines more, United Chief Executive Scott Kirby replied: "Yes and yes."
Industry executives say developing new technology costs billions of dollars and manufacturers often discount engines heavily upfront, expecting to recover that investment over years through parts and maintenance. Safran CEO Olivier Andriès last month said increases in repair and spare-parts prices should be moderate and reflect higher supplier costs rather than an "abusive posture."
GE Aerospace CEO Larry Culp said last month that LEAP-related aircraft groundings had fallen to near zero, and the company is rolling out upgraded parts designed to let engines stay on aircraft longer before major maintenance. RTX, which said it is improving durability and expanding repair capacity, reported Pratt's PW1100G repair output rose 43% in the second quarter from a year earlier and turnaround times fell 23%.
The engine shortage continues to hold aircraft on the ground, AerSale Chief Executive Nicolas Finazzo said on the company's second-quarter earnings call, noting 84 stored ex-Spirit Airlines aircraft at its Goodyear facility need engines before returning to service. For airlines, the cost overhang means higher maintenance bills will keep pressuring profit margins even as capacity returns, while engine makers benefit from sustained aftermarket demand.
This article is for informational purposes only and does not constitute investment advice.
