Airlines rue lack of planes as Boeing, Airbus delays stack up
Exasperation trumped exuberance at aviation’s largest annual trade expo, as airline executives lamented a shortage of Boeing and Airbus aircraft that’s shown no signs of letting up.
The plane making duopoly is still struggling to recover from a Covid-19 pandemic that ripped through the supply chain, forcing suppliers to shed workers with decades of experience.
Airbus has put the brakes on an ambitious production ramp-up, while an in-flight fuselage blowout on a 737 Max in January tipped Boeing into a crisis that’s sapped output.
Airlines eager to grow are instead having to pare back.
“This is a moment of pure frustration,” FlyDubai chief executive Ghaith Al Ghaith said at the Farnborough Air Show outside of London.
The budget carrier has received just four of the more than 10 Max aircraft that were scheduled to arrive in 2024, and was told last week that no more are coming for the rest of this year. Deliveries for 2025 are unclear.
“Whatever patience we had, this was too much,” Al Ghaith said. “This will have a major effect on operations.”
The gloom even filtered onto the podium at the event’s marquee deal, a 50-jet commitment from Korean Air Lines for Boeing’s two largest passenger models. The airline had ordered Airbus’s A350-1000 earlier in the year, setting up a competition of sorts over which planemaker can deliver first.
“Whichever comes on time will be our flagship,” said the airline’s chairman and chief executive, Walter Cho.
Order activity has been subdued at Farnborough after last year’s frenzy of postCovid business. Backlogs for the best-selling Airbus A320neo and Boeing’s 737 Max families now stretch to nearly 10 years of production at current rates, estimates George Ferguson of Bloomberg Intelligence.
As of Wednesday, Boeing led last week’s competition with 76 firm orders and 22 options – some US$13.7 billion (NZ$23.3b) worth of business altogether, based on market-value estimates from aviation consultant Ishka. Airbus logged an estimated US$8.7b, including deals with Japan Airlines and Virgin Atlantic Airways.
Orders for long-haul jets dominated, after airlines prioritised their pipelines of workhorse narrow body aircraft for the last decade.
For attendees, the focus has been on the topsy-turvy market where new and used airliners are increasingly scarce and suppliers are still struggling to deliver parts.
Gliders, airline parlance for new aircraft that lack engines, are stacking up with turbine supplies a major bottleneck. For the second time this year, General Electric cut its outlook for output of Leap narrow body engines used on both Boeing and Airbus jets.
“We’re trying to make progress every week but it’s a multi-year issue,” GE chief executive Larry Culp said.
Both Boeing and Airbus are helping suppliers through labour, training and capital constraints. The worst snarls have involved parts that require the “highest degree of artisanship or craftsmanship,” said Boeing senior vice president Ihssane Mounir, who oversees the plane-maker’s sprawling supplier network.
One of the newer trouble spots involves disruptions to some grades of steel used in bearings and engines, said Kevin Michaels, a managing director with consultant AeroDynamic Advisory. Some second-tier suppliers in Europe also have Covid-era loan payments coming due, limiting their ability to invest in stocking up on parts and raw goods to support a manufacturing ramp-up, he said.
“This isn’t an 18- or 24-month fix,” Michaels said. “I think you’re looking at the late 2020s. It’s just going to take time.”