The aviation industry is bracing for one more 12 months of difficulties, as delivery delays at Boeing and provide chain problems are set to proceed into 2025, say aviation consultants.
Sunday marked one 12 months since a door panel blew off a Boeing 737 Max 9 operated by Alaska Airlines, an event that reignited a firestorm of questions on Boeing’s quality and safety standards.
Since then, the corporate has instituted a series of changes, including mandatory workforce training and increased inspections, in keeping with a company statement published Friday. Boeing also said it improved its “Speak Up” system to encourage employees to report workplace concerns.
But that is not enough, Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International, told “Squawk Box Asia” Monday.
“The complete board of directors must have been fired,” he said. “The brand new CEO and recent people in there say they’re doing something, but that is such a deep problem.”
Without aircraft deliveries from Boeing, airlines similar to Southwest, Wizz Air and Ryanair are spending money they “had not desired to spend to overhaul airplanes they were going to retire,” Boyd said.
“Fasten your seat belt. It will be a really bumpy 12 months ahead,” he said.
“Boeing goes to be losing plenty of territory to our friends at Airbus. There’s just absolute confidence about it,” he said, adding that the corporate may change into more of a “secondary player” to Airbus in the long run.
Pete Buttigieg, the U.S. transportation secretary, said Monday that Boeing has “far more” work to do, in keeping with Reuters.
“The culture change at Boeing is something that may be a real work in progress,” he said. “The one method to fully assess it’ll be to see they’ll consistently improve results.”
John Grant, chief analyst on the aviation intelligence company OAG, said tangible improvements at Boeing are unlikely to come back before the tip of 2025, on the earliest.
“With the regulators crawling all around the company and recent processes being established, it’s perhaps too early to say that things are improving,” he said. “The excellent news is that things have not gotten any worse from an operational perspective.”
Nevertheless, “the financials and labor relations are one other issue,” he said.
Boeing hasn’t turned an annual profit since 2018. The corporate’s suffered one other production setback after its machinists initiated a seven-week strike that resulted in November with employees securing a 38% incremental wage increase.
A Boeing spokesperson told CNBC the corporate is concentrated on stabilizing the business and implementing its “Safety and Quality Plan.” The spokesperson highlighted a dozen actions Boeing took in 2024, from leadership changes to its board and the acquisition of Spirit AeroSystems to the expansion of its South Carolina site for increased production of its 787 aircraft.
Beyond Boeing
Problems within the aviation industry go well beyond Boeing, said Brendan Sobie, an independent analyst at Sobie Aviation.
From spare part shortages to engine maintenance, he said, “it’s about your entire ecosystem of firms which might be across the industry.”
“It has been a really difficult period, and there is no real sign of this going away anytime soon,” he said. “These are problems that can take years — not a single 12 months — to resolve.”
Sobie said airlines are particularly frustrated by reliability and maintenance problems at engine-makers Pratt & Whitney and Rolls-Royce.
As to the problems at Pratt & Whitney, he offered a glimmer of positivity for the industry: “It probably is past its worst period.”
What this implies for travelers
Engine problems are forcing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground portions of their fleet, said Boyd.
“The engines aren’t there,” he said. “Wizz Air within the E.U. just grounded 40 airplanes for the 12 months.”
That may make deals on airfare harder to seek out in 2025, he said. “If you happen to’re on the lookout for some really cheaper fares on the market, I do not think even Mr. O’Leary at Ryanair can promise that,” he said, referencing Ryanair’s CEO Michael O’Leary.
Scott Keyes, founding father of the air travel website Going, said airfares will likely increase in 2025. In a post on Dec. 30, Keyes outlined how flight costs to, from and inside the US have modified because the Covid-19 pandemic.
- 2020: -17%
- 2021: -4%
- 2022: +36%
- 2023: -12%
- 2024: +5%
Nevertheless, Sobie said that capability problems attributable to grounded flights could also be offset by a rise in flights, particularly in Asia-Pacific, where the industry remains to be recovering from the Covid pandemic.
He said airfares are normalizing at a level above pre-Covid fares but below 2022’s peak levels — nonetheless, costs and provide chain issues aren’t. This 12 months may bring some improvement, he said, but “overall, these challenges still remain.”
