“We are temporarily rethinking our just-in-time inventory approach…”
Fort Myers, Fla. — June 3, 2021 — The slowdown of the supply chain in industries around the globe is now impacting the private aviation industry. Christopher Schoensee, owner and president of Paragon Flight Training, said he’s stocking up on aircraft on ground (AOG) and mission critical parts such as spark plugs and oil filters now after seeing the beginning of a shortage and significant price increases in these and other key supplies over the past several months.
“The shortage of raw materials and supply chain issues in automotive and consumer technologies, especially with the microchip shortage, are well known, but I hadn’t noticed an impact on private aviation until we ordered spark plugs in early May and were told there was an 8-week backlog,” Schoensee said. “Then, when we went to order filters, the price had increased about 7% in three months’ time, which is not typical at all.”
Previously, Schoensee had a just-in-time approach to inventory, but that’s just not practical now, so he’s planning ahead.
“We are temporarily rethinking our just-in-time inventory approach, not only because of obtaining the parts, but also due to dramatic increases in costs and delays in delivery,” Schoensee said. “Pre-pandemic, I could order parts today and they would be shipped tomorrow. Now, I have an eight-month supply of all AOG and flight critical parts. I simply can’t risk not having access to the parts I need to run a flight school.”
While Schoensee says Paragon Flight can handle the current situation in the interim, it is especially tough for smaller flight schools that were severely hit by the pandemic shutdowns and can’t afford to spend more on parts or to stockpile them. He added that his company has had to purchase a higher price point spark plug – 25% to 30% more than the spark plugs they typically buy – because the standard plugs are on 60-day back order. Further, the parts shortage is requiring additional time by fight school owners to manage the business, given the extra effort needed to regularly check tracking numbers for parts arrivals and keep a closer eye on inventory in general.
Waiting anxiously for aviation insurance renewals
In the meantime, Schoensee says he and his colleagues in the flight school industry are anxiously awaiting their aviation insurance renewals in July.
“2019 renewal rates were relatively modest at 5% to 10%, but 2020 premium increases were an alarming 20% to 25%,” Schoensee said. “It seems that increases would be more measured this year because in 2020 many flight schools across the country merged or went out of business and flight time was down, presumably meaning fewer claims. We’re in a wait and see position now.”
About Paragon Flight Training
Paragon Flight is an award-winning flight academy headquartered at Page Field in Fort Myers, Florida. With FAA and SEVIS accreditations, a fleet of nearly 20 planes, and advanced simulator technology onsite, the company trains commercial, professional, and recreational pilots and as well as offering military pilot training for domestic and foreign governments. The company is in the process of a 22,000-combined-square-foot expansion slated for completion in fourth quarter 2021.