Boeing was plunged into crisis in January when a door panel on a 737 Max 9 jet exploded mid-flight. Credit: AP/National Transportation Safety Board
Airline passengers will face higher fares for years as the safety crisis engulfing Boeing is projected to limit aircraft deliveries for the better part of a decade.
Steven Udvar- Heisey, executive chairman of Air Lease, which has more than 300 planes worth $21bn (£17bn) on order from Boeing and Airbus, said not a single plane was delivered on time in the first quarter and that supply chain problems would weigh on both companies in the coming years.
He said the airline industry was suffering from “too little supply and too much demand, with no means of fixing the problem in the near future.”
Mr Udvar-Hazi added: “We don't see a realistic way to change the situation.” in the short and medium term. In fact, this imbalance is likely to continue for at least three to four years into the future.”
Air Lease's clients include many of the world's biggest airlines, from discounters EasyJet and Wizz Air to British Airways, Air France and Gulf giant Emirates.
Sash Tusa, an analyst at Agency Partners, warned that there was a manufacturing crisis at Boeing could lead to higher fares for airline passengers.
He said: “Four years is a long time, but given where Boeing is now with its inability to increase 737 production, it is a reasonable estimate.”
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“It’s economics 101, supply and demand. Airlines are going to do two things; cut your low-profit routes, and then raise prices on the rest of your networks.”
In January, Boeing found itself in crisis after a door panel on a 737 Max 9 jet exploded mid-flight. According to an initial investigation by the National Transportation Safety Board (NTSB), four bolts that were supposed to secure the panel to the plane's fuselage were missing.
After the incident in January, Boeing said: “Safety is our top priority, and we deeply regret the impact this event has had on our customers and their passengers.”
In March, Dave Calhoun, Boeing chief executive , has announced he will step down by the end of the year due to safety and financial concerns.
Ryanair chief Michael O'Leary has already warned that passengers will face higher prices in Europe this summer due to for lack of bandwidth.
The discount airline is expected to have a shortage of the equivalent of 10 737 Max aircraft during the July travel peak. after Boeing slowed deliveries.
Ryanair chief Michael O'Leary has already warned that passengers face higher prices in Europe because of this summer Photo: Holly Adams/Bloomberg
Rival Wizz was forced to ground 45 Airbus planes so that their Pratt & The Whitney engines were replaced after a manufacturing defect was discovered in the GTF turbine.
The rebound in traffic since Covid has seen planes flying at full capacity and Mr Udvar-Hazy said load factors, already above 80%, were likely to hit a record. levels at many carriers as people crowd into existing fleets.
John Pluger, chief executive of Air Lease, said the market for commercial aircraft is “as tight as we've ever seen in our history in this business ” “.
New aircraft models are also unlikely to bring relief to passengers. Mr. Udvar-Hazi said there was little chance that Embraer, the world's third-largest plane maker, would break into the Boeing-Airbus duopoly anytime soon, although the Brazilian company said it was exploring options for a new passenger model.
He said: “If someone wants to build a new generation aircraft, we will definitely evaluate these products. But they will also face the same supply chain challenges.”
Any new single-aisle airliner would also require new engine technology to achieve the required operational efficiency improvements, which is unlikely. will be available after 2030, he said.
The Chinese-made C919 is already an alternative to the 737 Max and A320neo, but orders still come almost entirely from airlines within China.
The model has not yet received regulatory approval in Europe and the US, and the sales tour has focused on Asian countries including Vietnam, Laos, Cambodia and Malaysia.
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