18 August 2026
Executive Summary
Airlines are beginning to return aircraft grounded by years of engine problems to service.
But the financial consequences are not disappearing nearly as quickly.
Air New Zealand provides an instructive example.
At one stage, engine problems left as much as 20% of its fleet unavailable, forcing the airline to lease replacement aircraft and engines to protect its schedules. Availability has since improved substantially, but its chief executive told Reuters that it could take another 12 to 18 months to unwind some of the additional leases and associated costs.
The wider engine crisis has involved durability problems, shortages of spare parts and repair capacity, and accelerated inspections associated with Pratt & Whitney’s powder-metal manufacturing issue.
Reuters reports that US airline spending on engine maintenance increased 68% between 2019 and 2025, significantly faster than growth in flying activity.
The risk lesson is important:
The cost of resilience can continue long after the disruption has ended.
UK Impact
UK businesses frequently purchase temporary solutions when essential assets become unavailable.
These can include:
- Aircraft.
- Vehicles.
- Generators.
- Warehouses.
- Temporary production equipment.
- Additional staff.
- Emergency IT infrastructure.
- Alternative logistics providers.
- Replacement machinery.
These arrangements may be essential to maintaining operations.
But emergency capacity often comes with:
- Minimum lease periods.
- Termination costs.
- Higher maintenance costs.
- Contractual commitments.
- Duplicate capacity.
- Mobilisation and demobilisation costs.
The result is that operations may return to normal while costs remain abnormal.
For insurers and risk managers, this creates an important distinction between operational recovery and financial recovery.
Global Impact
The aviation example demonstrates how quickly a shortage of repair capacity can turn into a secondary market for replacement assets.
When engines were unavailable, airlines competed for spare engines and aircraft leases.
Reuters reports that leasing rates for some engines climbed above $6,500 per day, while long repair-shop turnaround times encouraged carriers to retain leased assets for longer.
At the same time, delayed new-aircraft deliveries from Boeing and Airbus encouraged airlines to retain older aircraft, generating further maintenance requirements.
This is a classic feedback loop.
A shortage causes businesses to lease substitute capacity.
Everybody seeks substitute capacity simultaneously.
The substitute itself becomes scarce and expensive.
Then when the original problem improves, businesses remain contractually committed to the resilience measure they purchased.
Our View
Business-continuity planning should calculate the exit cost of emergency arrangements, not merely the cost of activating them.
Companies should ask:
- How long must emergency equipment be leased?
- Can contracts be terminated early?
- What penalties apply?
- Could emergency capacity become scarce during a sector-wide disruption?
- Are standby agreements negotiated in advance?
- Will the insurer reimburse extended mitigation costs?
- What happens when the original equipment returns earlier than expected?
- Could the company temporarily operate duplicate capacity?
- Is the replacement asset compatible with existing operations?
- How long will costs continue after normal operations resume?
Businesses often calculate the cost of surviving the crisis.
They should also calculate the cost of leaving the crisis behind.
Recovery is not complete when the factory, aircraft or system comes back online.
It is complete when the organisation has also unwound the expensive emergency arrangements that kept it operating.
Risk Indicator: ELEVATED
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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