The aviation industry is in for another year of problems, as Boeing delivery delays and supply chain problems are set to continue into 2025, aviation consultants say.
Sunday marked one year since a door panel dislodged from a Boeing 737 Max 9 operated by Alaska Airlines, an incident that sparked a firestorm of questions about Boeing's quality and safety standards.
Since then, the company has instituted a series of changesincluding mandatory staff training and increased inspections, according to s company statement released on Friday. Boeing also said it will improve its “Speak Up” system to encourage employees to voice concerns in the workplace.
But that's not enough, Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International, told “Squawk Box Asia” Monday.
“The whole board of directors should have been fired,” he said. “The new CEO and new people there say they're doing something, but this is such a deep problem.”
Without the delivery of planes from Boeing, airlines such as Southwest, Wizz Air and Ryanair are spending money they “didn't want to spend” to overhaul planes they were going to retire. quit,” Boyd said.
“Fasten your seat belts. We have a very bumpy year ahead of us,” he said.
“Boeing is going to lose a lot of ground to our friends at Airbus. There's no question about it,” he said, adding that the company could be more of a “top player” for Airbus in the future.
Pete Buttigieg, the US transportation secretary, said on Monday that Boeing has “a lot more work” to do, according to Reuters.
“The culture change at Boeing is a real work in progress,” he said. “The only way to fully evaluate it is to see that they can consistently improve results.”
Iain Grant, chief analyst at the aviation information company OAG, said that it is unlikely that there will be visible improvements at Boeing before the end of 2025, at the earliest.
“With the management crawling across the company and new processes being put in place, it may be too early to say that things are improving,” he said. “The good news is that they are not things have gotten worse from an operational point of view.”
However, “the finances and the working relationship is another matter,” he said.
Boeing has not turned an annual profit since 2018. The company suffered another halt in production after its engines started a seven-week strike that ended in November with workers receiving a 38% incremental pay rise.
A Boeing spokesperson told CNBC that the company is focused on stabilizing the business and “Safety and Quality PlanThe speaker highlighted a dozen actions Boeing took in 2024, from leadership changes on its board and the acquisition of Spirit AeroSystems to the expansion of its site in South Carolina for increased production of its 787 aircraft.
Beyond Boeing
Problems in the aviation industry go far beyond Boeing, said Brendan Sobie, an independent analyst at Sobie Aviation.
From spare parts shortages to engine maintenance, he said, “it's about the whole ecosystem of companies that surround the industry. “
“It was a very difficult time, and there is no sign of this going away anytime soon,” he said. “These are problems that will take years – not one year – to solve.”
Sobie said airlines in particular have been plagued by reliability and maintenance problems at engine makers Pratt & Whitney and Rolls-Royce.
As for the issues at Pratt & Whitney, he offered a glimpse of mystery to the industry: “It's probably over its worst period.”
What does this mean for travelers
Engine problems are forcing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground parts of their fleet, Boyd said.
“The engines are not there,” he said. “Wizz Air in the EU only 40 planes on the ground for the year.”
That will make aviation deals harder to find in 2025, he said. “If you're looking for significantly cheaper fares out there, I don't think even Mr O'Leary at Ryanair can guarantee that,” he said, referring to Ryanair's CEO, Michael O'Leary.
Scott Keyes, founder of the air travel website Going, said that airline prices will likely increase in 2025. In a post on December 30, Keyes said explained how the cost of flying 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, Sobie said that capacity problems caused by fixed flights could be offset by an increase in flights, especially in the Asia-Pacific, where the industry is still recovering from an epidemic. Covid pandemic.
He said normal flights are at a level above pre-Covid fares but below peak levels in 2022 – however, costs and supply chain issues are not. There could be some improvement this year, he said, but “overall, these challenges are still there.”
