Former Boeing Supply Chain Leader Thinks Airline Fake Parts Fiasco Could Fundamentally Alter Parts Sourcing
American, Southwest and United Airlines have been impacted by a counterfeit jet engine parts controversy shaking the aviation sector.
American, Southwest and United Airlines have been impacted by a counterfeit jet engine parts controversy shaking the aviation sector. Several have already swapped out the unverified components and resumed flights, but nearly 100 aircraft globally might still be impacted. We try to better understand the impact through our interview.
Interview Date: 09/22/2023
Participants: Ridgefort Research Analyst, BA(Boeing) — Former Supply Chain Manager (CF6 Engine)
Key Takeaways From Interview
Trust in Aviation: The aviation industry heavily relies on trust. Incidents like AOG Technics’ unapproved parts shake this trust, endangering reputations and passenger safety.
Supply Chain Impact: Due to AOG Technics’ issues, the entire aviation supply chain faces heightened scrutiny, leading to potential delays and more rigorous checks, especially given the prominence of components like the CF6 engine.
Documentation & Validation: Proper documentation is crucial in aviation parts validation. With recent falsified documents, stricter regulations and more detailed verifications are anticipated.
Industry Resilience: Despite challenges, the aviation industry prioritizes safety. Current crises may lead to short-term loss of passenger confidence, but proactive approaches and regulatory actions are in place to ensure and restore trust.
Transcript
[00:00:08] Ridgefort Analyst: I’d like to start off by thanking you for taking the time to speak with us today. Before we get started, could you give us an overview of your time with Boeing?
[00:00:32] Former Boeing Manager: Yes of course. I started at Boeing earlier in my career through a short internship and like some folks I wanted to be a test pilot (laughs). But that changed, after I had a chance to interact with some supply chain mentors and I started working on the engine parts team. Fast forward few years, I eventually led supply chain functions related to engine parts (e.g CF6). Some of my duties included purchasing and managing a global supply chain network…so you can think hundreds of suppliers and significant millions in parts spend. We ran a pretty tight ship.. or you could say aircraft operation.
[00:01:35] Ridgefort Analyst: Very interesting and super complex I can imagine.
[00:01:43] Ridgefort Analyst: So, with the recent news regarding AOG Technics and the sale of unapproved parts, can you give us a sense of what might be the repercussions for the aviation industry?
[00:01:55] Former Boeing Manager: Well, first off, this entire situation is alarming. I mean the aviation industry thrives on trust right? and incidents like these shake the very foundation of that trust. If airlines are using unapproved parts, especially critical components like bushings, it can pose serious safety risks. This isn’t just a simple oversight… it’s a matter of life and death for passengers.
[00:02:33] Ridgefort Analyst: How would you say this impacts the reputation of not just AOG Technics, but other suppliers as well?
[00:02:41] Former Boeing Manager: It’s a negative mark, to be honest. Every supplier in the chain will now be under scrutiny. Genuine suppliers who follow the rules will unfortunately get painted with the same brush because doubts have been sown. This can lead to additional audits, investigations, and delays across the entire supply chain.
[00:03:09] Ridgefort Analyst: I see… Considering the CF6 engine’s prominence, do you think the repercussions will be extensive?
[00:03:17] Former Boeing Manager: Absolutely. The CF6 engine is a bit of a legend. With its vast distribution — I believe it powers over 7000 aircraft at least when I last checked — the ripple effect will be enormous. With its ties to even the president’s Air Force One, this isn’t a small-scale concern. Airlines, regulators, and maintenance providers will now have to double-check every part, leading to potential disruptions and delays.
[00:03:55] Ridgefort Analyst: With the CF6 expected to remain in service till 2040, how will this impact GE’s plans?
[00:04:03] Former Boeing Manager: This could be a setback for GE. They’ve invested a lot into the CF6’s longevity and success. The trust with their customers will be tested. It’s not just about the immediate need for replacements but also the long-term service contracts and relationships with airlines. So I think it could also affect GE’s plans to repurchase engines from airlines impacted by the pandemic.
[00:04:35] Ridgefort Analyst: How significant is the role of documentation in parts validation?
[00:04:43] Former Boeing Manager: Documentation is paramount. It’s how we trace and validate the origin and history of each part. Without it, or with falsified documents, the integrity of the entire validation process is compromised..so we can’t be sure what part is 100% trustworthy.
[00:05:05] Ridgefort Analyst: With so many falsified documents in circulation, especially from such a big player, what does this mean for the future of aviation parts’ validation?
[00:05:17] Former Boeing Manager: The validation process will need a massive overhaul… The entire supply chain might see new, stricter regulations and tighter checks. Every part’s provenance will have to be verified even more rigorously. The industry was already meticulous, but now, there’ll be an added layer of skepticism.
[00:05:45] Ridgefort Analyst: Can this situation be used as a lesson for the future? How?
[00:05:51] Former Boeing Manager: Definitely. I mean it’s a big reminder that we can never be too complacent. This incident provides an opportunity to reinforce checks and balances, enhance transparency, and bolster communication within the industry.
[00:06:09] Ridgefort Analyst: How do you see airlines and other entities responding to these findings?
[00:06:15] Former Boeing Manager: Airlines are already in crisis mode. United Airlines, Southwest Airlines, and Virgin Australia are just the tip of the iceberg. They’re going to have to check, re-check, and possibly replace parts, which means more grounded planes and more expenses. This could also lead to more in-depth collaborations between airlines, manufacturers, and regulators to prevent such incidents in the future.
[00:06:45] Ridgefort Analyst: Do you think passengers will lose faith in the aviation industry because of this?
[00:06:51] Former Boeing Manager: There will be a short-term loss of confidence, for sure!…But the aviation industry has weathered storms before. As long as we’re proactive in addressing the issue, being transparent about the steps taken, and ensuring safety at all times, trust can be rebuilt.
[00:07:15] Ridgefort Analyst: The EASA and other regulatory bodies are on this. Do you see any possible shifts in international aviation standards as a result?
[00:07:23] Former Boeing Manager: Definitely. Global standards might become even more stringent. The EASA is already alerting operators to quarantine parts with false documentation. I could see a lot tighter regulations, with international bodies working more closely together to ensure that safety isn’t compromised.
[00:07:49] Ridgefort Analyst: One last thing before we wrap up — for all the travelers out there, including me, how worried should we be?
[00:07:57] Former Boeing Manager: Look, the aviation industry is built on safety. It’s the number one priority. Incidents like this are rare, and when they happen, they’re addressed with the utmost urgency. While this does raise concerns, travelers should know that every possible step is being taken to ensure their safety. The very fact that this has come to light and is being addressed so aggressively should offer some reassurance… so I still plan to hop on my next flight!
[00:08:37] Ridgefort Analyst: Thank you for your insights today. It’s been enlightening.
[00:08:40] Former Boeing Manager: Thank you for having me. Let’s hope the industry emerges stronger and safer from this.