The summer travel season is back in full swing, but if you're hoping to jet off to a sunny beach, you might be in for a treat thanks to Boeing's latest misfortunes. The US aircraft manufacturer has been plagued by a slew of problems over the past five years, leading some travel experts to say the summer of 2024 will be even more of a headache for holidaymakers.
That includes aviation supply chain issues as Boeing struggles to allay concerns about the safety of its planes, particularly the troubled Boeing 737 Max model. That's likely to raise travel costs and force some people to put off summer getaways. How are Boeing's problems translating into trouble in the skies?
What is causing the problems at Boeing?
Boeing's safety and supply chain issues over the past few years have left a trail of turmoil, most notably its supply chain issues. After a series of high-profile incidents, including a door plug blowing off an Alaska Airlines plane, Boeing came under “intense federal and public pressure to improve the quality of its aircraft,” which resulted in the company's “production of the 737 Max jet being shrunk to a trickle,” according to Forbes.
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What does “trickle” mean? According to Forbes, Boeing delivered 24 aircraft to airline customers in March this year, a 53% decrease from the previous year. Statistics from aviation analytics firm Cirium cited by Forbes showed that the company delivered just three aircraft in the first two weeks of April. Martha Neubauer, senior associate at Aerodynamic Advisory, told Forbes that U.S. airlines are on track to receive a total of 301 passenger aircraft in 2024, 40% fewer than originally expected this year. However, it should be noted that this is not entirely Boeing's fault. Boeing's main competitor, Airbus, is also experiencing supply chain problems and “accounts for 38% of the aircraft that could not be delivered to airlines this year,” Neubauer said.
But the bulk of the supply problems lie with Boeing and the 737 Max, especially after “US regulators ordered production limits on the plane” following the Alaska Airlines disaster, Bloomberg noted. While this was “intended to put Boeing's focus on safety, the move has dealt a major blow to production of the new plane, with thousands already on backorder.”
How will this affect summer travelers?
Planes may be grounded, but demand for summer travel remains high, meaning travelers will likely open up their wallets. “Expect higher airfares this summer as airline supply struggles to keep up with demand,” Business Insider said.
This is especially true considering that the International Air Travel Association predicts that 4.7 billion people will take vacations this year, and air passenger numbers are expected to reach new records in 2024. But Boeing's problems “will have real ripple effects on consumers,” Yahoo! Finance notes. Fewer available planes combined with rising demand “could lead to higher ticket prices, which could result in people paying more for their next trip.”
This means airfares “should remain elevated through 2024, rather than gradually declining as has happened since May of last year,” Robert Mann, founder of aviation consulting firm R.W. Mann & Co., told CNN. Mann pointed to fare-tracking data from earlier this year showing a spike, with “travel fares booked in February of this year being 5 to 6 percent higher than the same month last year, well above the overall rate of inflation,” CNN said.
While most of the issues concern domestic flights, there are concerns on international routes as well. Michael O'Leary, CEO of Irish airline Ryanair, told Barron's that Boeing's delivery delays could cause ticket prices for the airline to rise by as much as 10%. Ryanair has “budgeted for a fare increase of 5 to 10 percent, which we think is reasonable,” O'Leary said.
When will things get better? It's unclear. “It's unclear when aircraft will be delivered to airlines around the world that had planned to receive aircraft as part of their summer programs,” John Grant, senior analyst at travel data company OAG, told Brides.
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