The aviation industry is bracing for another year of challenges, as Boeing delivery delays and supply chain problems are expected to continue into 2025, aviation consultants say.
Sunday marked one year since a door panel exploded on a Boeing 737 Max 9 operated by Alaska Airlines, an event that reignited a storm of questions about Boeing’s quality and safety standards.
Since then, the company has implemented a series of changes, including mandatory workforce training and increased inspections, according to a report. company statement released Friday. Boeing also said it had improved its “Speak Up” system to encourage employees to report workplace concerns.
But that’s not enough, Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International, told “Squawk Box Asia” on Monday.
“The entire board should have been fired,” he said. “The new CEO and the new people there say they’re doing something, but it’s such a deep problem.”
Without Boeing’s plane deliveries, airlines such as Southwest, Wizz Air and Ryanair are spending money they “wouldn’t have wanted to spend overhauling planes they were going to retire,” he said. Boyd.
“Fasten your seat belt. This is going to be a very busy year,” he said.
“Boeing is going to lose a lot of territory to our friends at Airbus. There’s no doubt about that,” he said, adding that the company could become more of a “secondary player” to Airbus in the future.
Pete Buttigieg, the US Transportation Secretary, said on Monday that Boeing had “a lot more” work to do, according to Reuters.
“Culture change at Boeing is truly a work in progress,” he said. “The only way to fully evaluate it will be to see that they can constantly improve their results.”
John Grant, chief analyst at aviation intelligence firm OAG, said tangible improvements at Boeing are unlikely to come before the end of 2025, at the earliest.
“With regulators all over the business and new processes being put in place, it may be too early to say things are improving,” he said. “The good news is that the situation has not worsened from an operational point of view.”
However, “finances and labor relations are another issue,” he added.
Boeing hasn’t made an annual profit since 2018. The company suffered another production setback after its machinists launched a seven-week strike that ended in November and workers won an additional pay raise by 38%.
A Boeing spokesperson told CNBC that the company is focused on stabilizing the business and implementing its “Safety and Quality PlanThe spokesperson highlighted a dozen actions Boeing will take in 2024, from leadership changes on its board and the acquisition of Spirit AeroSystems to the expansion of its Carolina facility. South to increase production of its 787 planes.
Beyond Boeing
The aviation industry’s problems go far beyond Boeing, said Brendan Sobie, an independent analyst at Sobie Aviation.
From the shortage of spare parts to engine maintenance, he said, “it affects the entire ecosystem of businesses that surround the industry.”
“It’s been a very difficult time, and there’s no real sign that it’s going to stop anytime soon,” he said. “These are problems that will take years – not just one year – to resolve.”
Sobie said airlines are particularly frustrated by reliability and maintenance problems at engine manufacturers Pratt & Whitney and Rolls-Royce.
As for the problems at Pratt & Whitney, he offered a glimmer of positivity for the industry: “The worst time is probably over.”
What this means for travelers
Engine problems are forcing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground parts of their fleets, Boyd said.
“The engines aren’t there,” he said. “Wizz Air in the EU has just 40 planes grounded for the year.”
That will make deals on plane tickets harder to find in 2025, he said. “If you’re looking for really cheaper fares, I don’t think even Mr O’Leary at Ryanair can promise you that,” he said, referring to Ryanair CEO Michael O’Leary.
Scott Keyes, founder of the air travel website Going, said airfares would likely increase in 2025. In a Dec. 30 article, Keyes describe how the costs of flights to, from and within the United States have changed since the Covid-19 pandemic.
- 2020: -17%
- 2021: -4%
- 2022: +36%
- 2023: -12%
- 2024: +5%
However, Sobie said capacity issues caused by grounded flights could be offset by an increase in flights, particularly in the Asia-Pacific region, where the industry is still recovering from the Covid pandemic.
He said airfares are normalizing to a level above pre-Covid fares but below peak 2022 levels – however, costs and supply chain issues are not. This year might bring some improvements, he said, but “overall these challenges remain.”
