The aviation industry is bracing for another tumultuous year as Boeing Co.’s delivery delays and supply chain issues continue into 2025, aviation consultants say.
Sunday marks the one-year anniversary of a door panel exploding on a Boeing 737 Max 9 airliner operated by Alaska Airlines, an incident that has once again raised questions about Boeing’s quality and safety standards.
Since then, the company has implemented a series of changes, including mandatory employee training and increased inspections, according to a person familiar with the matter. The company issued a statement on Friday. Boeing also said it has improved its “whistleblowing” 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 be fired,” he said. “The new CEO and new employees say they are doing something, but this is a deep problem.”
Boyd said that without Boeing aircraft deliveries, airlines such as Southwest Airlines, Wizz Air and Ryanair would spend “money they didn’t want to spend on overhauling aircraft that are retiring.”
“Buckle up. It’s going to be a rough year ahead,” he said.
“Boeing is going to lose a lot of territory to our friends at Airbus. There’s no question about that,” he said, adding that the company could become a “secondary player” to Airbus in the future.
U.S. Transportation Secretary Pete Buttigieg said on Monday that Boeing had “more” work to do, Reuters reported.
“Cultural change at Boeing is a real work in progress,” he said. “The only way to fully assess that is to see if they can continue to improve results.”
John Grant, principal analyst at aerospace intelligence firm OAG, said Boeing is unlikely to see material improvements until the end of 2025 at the earliest.
“With regulators spread throughout the company and new processes being established, it’s probably too early to say things are improving,” he said. “The good news is that from an operational perspective, things are not getting worse. ”
However, “finances and labor relations are another issue,” he said.
Boeing has not posted an annual profit since 2018.
A Boeing spokesperson told CNBC the company is focused on stabilizing its business and implementing “Safety and Quality ProgramThe spokesman highlighted more than a dozen actions Boeing is taking in 2024, from board leadership changes and the acquisition of Spirit AeroSystems to expanding a South Carolina factory to increase production of the 787 aircraft.
Beyond Boeing
Brendan Sobey, an independent analyst with Sobey Aviation, said the aviation industry’s problems extend far beyond Boeing.
From spare parts shortages to engine maintenance, “it’s about the entire ecosystem of companies in the industry,” he said.
“This is a very difficult time and there’s no sign that this is going to go away anytime soon,” he said. “These are problems that will take years — not a year — to resolve.”
Sobie said airlines are particularly frustrated by reliability and maintenance problems at engine manufacturers Pratt & Whitney and Rolls-Royce.
As for Pratt & Whitney’s problems, he offered a glimmer of positivity for the industry: “The worst may be over.”
What this means for travelers
Boyd said engine problems have forced many airlines, including Hawaiian Airlines and Spirit Airlines, to ground parts of their fleets.
“The engine wasn’t there,” he said. “The EU’s Wizz Air has just 40 planes grounded This year.
He said this would make airfare deals for 2025 harder to find. “If you’re looking for some really cheap fares, I don’t think even Mr O’Leary from Ryanair can guarantee that,” he said, referring to Ryanair CEO Michael O’Leary.
Scott Keyes, founder of air travel website Going, said ticket prices are likely to rise in 2025. Overview Here’s how the cost of flights to, from and within the United States has changed since the Covid-19 pandemic.
- 2020: -17%
- 2021: -4%
- 2022: +36%
- 2023: -12%
- 2024: +5%
However, Sobhi said the capacity issues caused by the grounding of flights may be offset by an increase in flights, especially in the Asia-Pacific region, where the aviation industry is still recovering from the new crown epidemic.
he said Airline ticket prices are normalizing, above pre-COVID fare levels but below peak levels in 2022, but cost and supply chain issues are not. This year may bring some improvements, he said, but “overall, these challenges remain.”
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