The airline 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 flew off an Alaska Airlines Boeing 737 Max 9, an event that has reignited a firestorm of questions about Boeing’s quality and safety standards.
Since then, the company initiated a series of changesincluding mandatory workforce training and increased inspections, according to a a company statement released on Friday. Boeing also said it has improved its “Speak Up” system to encourage employees to report workplace issues.
But that’s not enough, Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International, told “Squawk Box Asia” Monday.
He should have dismissed the entire board of directors, he said. “The new CEO and the new people there say they’re doing something, but this is such a deep problem.”
Without Boeing taking delivery of the planes, airlines such as Southwest, Wizz Air and Ryanair are spending money they “didn’t want to spend overhauling planes they were going to retire,” Boyd said.
“Fasten your seat belts. It’s going to be a very tough year ahead,” he said.
“Boeing is going to lose a lot of territory 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, US Transportation Secretary, said on Monday that Boeing has “much more” work to do, Reuters reports.
“Changing the culture at Boeing is something that is a real work in progress,” he said. “The only way to fully assess that will be to see that they can keep improving the results.”
John Grant, chief analyst at aviation intelligence firm OAG, said tangible improvements at Boeing were unlikely to occur before the end of 2025, at the earliest.
“As regulators creep across the company and new processes are put in place, it may be too early to say things are improving,” he said. “The good news is that things haven’t gotten any worse from an operational perspective.”
However, “financial and labor relations are another matter,” he said.
Boeing has not posted an annual profit since 2018. The company suffered another drop in production after its engineers started a seven-week strike that ended in November with workers securing an incremental wage increase of 38%.
A Boeing spokesperson told CNBC that the company is focused on stabilizing operations and implementing its “Safety and quality plan.” The spokesman highlighted a dozen actions Boeing has taken in 2024, from board leadership changes and the acquisition of Spirit AeroSystems to the expansion of its South Carolina location to increase production of its 787 aircraft.
Except for Boeing
The problems in the airline 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 are in the industry.”
“It’s been a very difficult period and there’s no real sign that this is going away anytime soon,” he said. “These are problems that will take years to solve — not just one year.”
Sobie 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 is probably over.”
What this means for travelers
Engine problems are forcing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground parts of their fleets, Boyd said.
“The engines aren’t there,” he said. “Wizz Air in the EU right now 40 aircraft grounded in a year.”
This will make it harder to find deals on airline tickets in 2025, he said. “If you’re looking for really cheap 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 Keyes, founder of the air travel website Going, said airfares are likely to rise in 2025. In a Dec. 30 post, 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, Sobie said capacity issues caused by grounded flights could be offset by increased flights, particularly in Asia Pacific, where the industry is still recovering from the Covid pandemic.
he said Airfare prices are normalizing at a level above pre-Covid prices but below 2022 peaks — costs and supply chain issues, however, are not. This year may bring some improvements, he said, but “overall, these challenges remain.”
