The aviation industry is bracing for another difficult year as Boeing delivery delays and supply chain problems are expected to last into 2025, aviation consultants say.
Sunday marked one year since a door panel was torn off an Alaska Airlines Boeing 737 Max 9, an event that reignited a firestorm of questions about Boeing's quality and safety standards.
Since then, the company has made a number of changes, including mandatory workforce training and increased inspections, according to a company statement released Friday. Boeing also said it has 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 are doing something, but this is such a big problem.”
Without aircraft deliveries from Boeing, airlines like Southwest, Wizz Air and Ryanair are spending money they “didn't want to spend on overhauling planes they wanted to retire,” Boyd said.
“Buckle up. It’s going to be a very bumpy year,” he said.
“Boeing will lose a lot of territory to our friends at Airbus. There’s no question about that,” he said, adding that the company may become more of a “secondary player” to Airbus in the future.
According to Reuters, Pete Buttigieg, the US transportation secretary, said on Monday that Boeing still had “a lot more” work to do.
“Culture change at Boeing is something that is still a work in progress,” he said. “The only way to fully assess this is to see that they can continually improve results.”
John Grant, chief analyst at aviation intelligence firm OAG, said noticeable improvements at Boeing are not expected until late 2025 at the earliest.
“With regulators buzzing around the company and new processes being put in place, it may be too early to say things are improving,” he said. “The good news is that operationally it hasn’t gotten any worse.”
However, “finances and labor relations are a different issue,” he said.
Boeing has not made an annual profit since 2018. The company suffered another production setback after its machinists began a seven-week strike that ended in November and gave workers a 38% wage increase.
A Boeing spokesperson told CNBC the company is focused on stabilizing its business and executing its “safety and quality plan.” The spokesman highlighted a dozen actions Boeing has taken in 2024, from leadership changes on its board and the acquisition of Spirit AeroSystems to expanding its South Carolina facility to increase production of its 787 planes.
Beyond Boeing
The problems in the airline industry go far beyond Boeing, said Brendan Sobie, an independent analyst at Sobie Aviation.
From parts shortages to engine maintenance, he said, “It’s about the entire ecosystem of companies in the industry.”
“It has been a very difficult time and there are no real signs that this will be over any time soon,” he said. “These are problems that will take years – not a single year – to resolve.”
Sobie said airlines were particularly frustrated by reliability and maintenance problems at engine makers Pratt & Whitney and Rolls-Royce.
As for Pratt & Whitney's problems, he offered a hint of positivity for the industry: “It's probably past its worst.”
What this means for travelers
Engine problems are forcing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground portions of their fleets, Boyd said.
“The engines aren’t there,” he said. “Wizz Air has just stopped 40 aircraft from flying in the EU this year.”
That will make it harder to find flight deals in 2025, he said. “If you're looking for really cheaper fares, I don't think even Ryanair's Mr O'Leary can promise that,” he said, referring to Ryanair CEO Michael O'Leary.
Scott Keyes, founder of air travel website Going, said airfares are likely to rise in 2025. In a Dec. 30 post, Keyes 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 capacity issues caused by flight suspensions could be offset by an increase in flights, particularly in Asia Pacific, where the industry is still recovering from the Covid pandemic.
He said Airfares are normalizing to levels above pre-Covid fares but below 2022 peaks – but this is not the case with costs and supply chain issues. This year may bring some improvements, he said, but “overall, these challenges remain.”
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