Airlines Brace for Summer Turbulence as Plane Shortage Threatens Global Travel
The industry is facing challenges due to production difficulties and disruptions in the supply chain of the two leading aircraft manufacturers, Boeing and Airbus
Photo: Courtesy of Denver International Airport.
The airline industry is on the verge of a tumultuous summer, grappling with a severe shortage of planes to meet the surging global demand for air travel.
The US, Europe, and Asia are witnessing travel demand levels that haven’t been seen since pre-pandemic times. However, aircraft production has been severely hampered due to persistent issues with commercial aircraft suppliers that provide parts for Airbus and Boeing.
As first reported by Reuters, airlines are currently in a race against time, pouring billions of dollars into maintaining older aircraft and leasing jets from private owners. However, there are grave concerns that many airlines might be forced to curtail flights to cope with the overwhelming demand, potentially disrupting air travel for many.
Photo: Boeing 787-10 Dreamliner in final assembly. Courtesy of Boeing
Moreover, the number of passengers is expected to reach an all-time high, with 4.7 billion people projected to travel by air in 2024. However, the International Air Transport Association (IATA) has predicted a 9 percent annual growth in global airline capacity during 2024. This prediction may not be feasible considering the current production issues at Airbus and Boeing.
According to Martha Neubauer, senior associate at AeroDynamic Advisory, passengers can expect to receive “19 percent fewer aircraft” due to manufacturing issues at Airbus and Boeing. A rare manufacturing flaw in the Pratt & Whitney-designed engines could result in up to 650 Airbus A320neo jets idle during the first half of 2024.
The scarcity of new planes has triggered a boom in the aircraft lease market as airlines grapple to meet the demand. Lease rates for Boeing 737s and Airbus A320s have shot up to $400,000 a month, the highest since mid-2008. Airlines are now shelling out 30 percent more on aircraft leases than they did before the pandemic, straining their financial resources.
Photo: Lufthansa, Airbus A320 in maintenance. Courtesy of Lufthansa
This expenditure on aircraft leases, repairs, and associated costs could disrupt airlines’ profit margins. The impact of this situation remains to be seen.
Boeing’s safety concerns and subsequent production issues could ‘persist for years,’ according to a new analysis by Morningstar. This could affect the orders backlog as it will take both companies more than 11 years to fulfill orders at the current production rates.
Southwest and United Airlines are the two US airlines most affected, as they have sizeable Boeing order backlogs. They have responded by reducing critical staff numbers, with United Airlines offering pilots voluntary unpaid leave. Other international airlines impacted include Europe’s low-cost market leader Ryanair, Emirates, Air India, and VietJet Air.
