Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
The aviation industry is bracing for another year of turbulence as delivery delays at Boeing and supply chain problems continue into 2025, aviation consultants say.
Sunday marked one year since a door panel blew off an Alaska Airlines Boeing 737 Max 9. This event once again raised questions about Boeing’s quality and safety standards.
Since that time the company introduced a number of changesincluding mandatory workforce training and increased inspections, according to a a company statement released Friday. Boeing also said it has improved its “Speak Up” system to encourage employees to report workplace issues.
But that’s not enough, said Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International.Squawk Box Asia“Monday.
“The entire board of directors 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-seated problem.”
Without the supply of planes from Boeing, airlines such as Southwest, Wizz Air and Ryanair are spending money they “didn’t want to spend on overhauling planes that were going to be retired,” Boyd said.
“Fasten your seat belts. It’s going to be a very difficult year ahead,” he said.
“Boeing will lose a lot of ground 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 Monday that Boeing has “significantly more” work to do, Reuters reported.
“Culture change at Boeing is something that is in real progress,” he said. “The only way to fully appreciate it is to see that they can continuously improve the results.”
John Grant, chief analyst at aviation intelligence firm OAG, said tangible improvements at Boeing are unlikely to occur before the end of 2025.
“With regulators crawling across the company and new processes being created, it may be too early to say things are getting better,” he said. “The good news is that things haven’t gotten any worse from an operational standpoint.”
However, “financial and labor relations are another issue,” he said.
Boeing has not posted an annual profit since 2018. The company suffered another downturn in production after its machinists started seven-week strike that ended in November with an increase in workers’ wages by 38%.
A Boeing spokesman told CNBC that the company is focused on stabilizing the business and implementing its “Safety and Quality Plan.” The spokesman highlighted a dozen actions Boeing is taking in 2024, from a change in board leadership and the acquisition of Spirit AeroSystems to an expansion of a plant in South Carolina to increase production of 787 airplanes.
Except for Boeing
The problems in the aviation industry extend far beyond Boeing, said Brendan Sobie, an independent analyst at Sobie Aviation.
From spare parts shortages to engine maintenance, he said, “we’re talking about the entire ecosystem of companies that work in this industry.”
“It has been a very difficult period and there are no signs that it will end soon,” he said. “These are problems that will take years to solve — not just one year.”
Sobey said airlines are particularly frustrated by reliability and maintenance issues at engine makers Pratt & Whitney and Rolls-Royce.
As for the problems at Pratt & Whitney, he offered a glimmer of positivity for the industry: “The worst period is probably over.”
What this means for travelers
The engine problems are causing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground part of their fleet, Boyd said.
“There are no engines,” he said. “Wizz Air is EU only 40 planes were stopped in a year”.
That will make airfare deals harder to find in 2025, he said. “If you’re looking for really cheaper fares, I don’t think even Mr O’Leary of Ryanair can promise that,” he said, referring to Ryanair chief executive Michael O’Leary.
Scott Keys, founder of airline travel website Going, said airfares are likely to rise in 2025. In a message dated December 30, Keyes outlined 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, Sobi said that capacity issues caused by grounded flights could be offset by increased flights, especially in the Asia-Pacific region, where the industry is still recovering from the Covid pandemic.
He said air ticket prices are normalizing to levels above pre-Covid fares but below 2022 peak levels, but costs and supply chain issues are not normalizing. This year may bring some improvements, he said, but “overall, these problems still remain.”
