08 January 2026
Rising Claim Costs in Aviation A Focus on Escalating Aerospace Engine Repair Expenses
A Plane Talking special feature
The aviation sector is currently facing a pronounced and sustained rise in claim costs, with the maintenance and repair of aero engines emerging as a primary driver. Drawing on detailed analysis from our proprietary Jacinth system, this article examines the underlying factors driving these increasing expenses and highlights the broader challenges facing the industry.
Over the past five years, the cost of aircraft engine repairs has risen dramatically, placing growing financial pressure on airlines and maintenance organisations. This trend goes beyond familiar influences such as inflation or gradual technological improvements. Instead, it is driven by a complex combination of material shortages, regulatory and competitive changes in the maintenance market, and evolving demands for specialised technical capability.
Aviation maintenance depends heavily on the reliable availability of high-quality components, rare materials, and skilled personnel. In recent years, geopolitical challenges in sourcing essential materials, such as titanium, nickel, and palladium, have become increasingly pronounced. These metals are critical to the production and repair of modern aircraft engines; yet, their supply is increasingly vulnerable to regional instability, trade restrictions, and rising global demand from multiple high-technology sectors. As a result, material shortages have led to significant price increases and delays, affecting maintenance schedules and driving up costs.
Quality control issues have further exposed vulnerabilities in engine maintenance operations. A notable example involves contamination in the powder metal used to manufacture critical turbine components for the Pratt and Whitney PW1000G engine. Between 2015 and 2021, microscopic impurities introduced by a third party compromised the integrity of these parts, resulting in the grounding of hundreds of engines and widespread flight disruptions. The financial consequences have been severe, with RTX, Pratt and Whitney's parent company, incurring costs estimated in the billions. This incident underlined the importance of rigorous quality assurance and strong supplier oversight, emphasising the need for continuous vigilance across sourcing and manufacturing processes.
Another major factor contributing to rising costs is the ongoing shortage of skilled technical personnel. The complexity of modern aircraft engines requires maintenance specialists with advanced training and experience. However, developing such proficiency is time-consuming and resource-intensive, and the current workforce pipeline has not kept pace with industry demand. This imbalance has driven up wages and created fierce competition for talent, further increasing repair costs. Prolonged wait times for critical maintenance have become increasingly common, with engines often remaining out of service far longer than expected due to bottlenecks in both parts’ availability and skilled labour.
The structure of the engine maintenance market has also undergone a fundamental shift. For many years, airlines benefited from a broad and competitive network of independent maintenance, repair, and overhaul providers. Engines such as the CFM56 and V2500 were supported by numerous qualified vendors, enabling airlines to seek competitive bids and benefit from market-driven pricing and service quality. This competition played a crucial role in keeping costs manageable.
Claims involving New Generation engines have surged by approximately 95%, whereas claims for conventional engines have risen at a comparatively slower rate of around 26%.
Modern aircraft engines, such as the Rolls-Royce Trent XWB, the General Electric GEnx, the Pratt and Whitney PW1100, and the CFM Leap, are built with advanced proprietary technologies. These advancements have allowed manufacturers to maintain strict control over their intellectual property and repair rights. This means that airlines and operators now face a more restricted system for engine maintenance. Unlike older engines, such as the PW4000, CFM56 and V2500, which were supported by a wide network of independent maintenance providers, the new generation of engines can only be serviced by the original manufacturers or a small group of licensed partners.
This shift has significantly reduced competition in the maintenance market, allowing manufacturers to exert greater control over pricing for repairs and replacement parts. As a result, airlines have fewer options and often face higher costs for maintaining these engines. While these new engines offer improved fuel efficiency and performance, they also tie operators to a single-source maintenance model, which can be expensive and limit flexibility. This exclusivity has significantly reduced competition in the market, creating conditions akin to a monopoly. Consequently, manufacturers have gained considerable power, enabling them to set prices for both replacement parts and maintenance services with little external pressure. This lack of competitive pressure can lead to higher costs for airlines, as they have limited or no alternative options for servicing their engines.
While these engines offer improvements in fuel efficiency and performance, they also bind operators to a single-source maintenance model, often at considerable expense.
This dynamic is further complicated by the fact that many modern aircraft engines are leased rather than owned outright, representing a significant portion of an aircraft's overall value. In recent cases of hull total loss, the inclusion of these high-value leased engines can substantially increase the claim amount, sometimes surpassing initial hull valuations. This reality underscores the increasing financial complexity that insurers and operators must navigate, particularly as aviation technology becomes more advanced and costly.
Data from Gallagher’s comprehensive analysis of Hull Deductible engine claims highlights a notable trend: the cost of relatively minor engine repairs resulting from foreign object damage and bird strike incidents has increased by approximately 39% over the past three years. However, a deeper examination of the data reveals a significant disparity between new and older technology. Claims involving New Generation engines have surged by approximately 95%, whereas claims for conventional engines have risen at a comparatively slower rate of around 26%.
Data from Gallagher’s comprehensive analysis of Hull Deductible engine claims highlights a notable trend: the cost of relatively minor engine repairs resulting from foreign object damage and bird strike incidents has increased by approximately 39% over the past three years. However, a deeper examination of the data reveals a significant disparity between new and older technology. Claims involving New Generation engines have surged by approximately 95%, whereas claims for conventional engines have risen at a comparatively slower rate of around 26%.
The combination of material shortages, regulatory constraints, workforce scarcity, and a consolidated repair market has created a challenging environment for cost control. Airlines and maintenance providers face not only higher direct costs but also longer downtimes and reduced operational flexibility.
The rising costs and challenges in aircraft engine maintenance highlight the significant changes in the aviation industry. As engines become more advanced and make up a bigger part of an aircraft’s value, the way costs and risks are handled will also change. This change means reevaluating how the true cost and value of aircraft and their engines are understood. It encourages everyone to rethink how the industry deals with the growing expenses and complexities of modern technology.
All figures in USD
Jump back in to Plane Talking Q4 2025
Navigating Turbulence: Challenges and Evolution in Aviation Underwriting
Aviation underwriting faces constant challenges, from global crises to market shifts, requiring agility, expertise, and sustainable practices. Cristina Quintero from MAPFRE Global Risks shares her view.
Airline Insurance Q&A
Nigel Weyman reflects on 2025’s Airline Insurance challenges, renewal trends, and market shifts, sharing insights and strategies to help buyers navigate 2026 with confidence.
Manufacturing and Infrastructure market update Q4 2025
Aerospace Manufacturing & Infrastructure saw minimal change in 2025 despite airline losses. Explore market trends, capacity, challenges, and outlook for 2026.
Navigating The Skies - A Market Update on Carbon Credits and CORSIA
In this second Plane Talking Special feature, we explore CORSIA’s impact on airline economics and carbon risk. Learn how insurance solutions can help carriers manage compliance, offset obligations, and address emerging challenges.
The Walbrook Building 25 Walbrook London, EC4N 8AW
Privacy Policy - Do Not Sell or Share My Personal Information (U.S. Residents Only)
Arthur J. Gallagher (UK) Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 119013.