The aviation industry is bracing for another year of turmoil as Boeing delivery delays and supply chain problems continue into 2025, aviation consultants say.
Sunday marked one year since a door panel exploded on a Boeing 737 Max 9 operated by Alaska Airlines. The event once again raised a storm of questions about Boeing's quality and safety standards.
Since then the company introduced a number of changesincluding mandatory employee training and increased inspections, in accordance with Art company statement published on Friday. Boeing also said it has enhanced its “Speak Up” system to encourage employees to report workplace concerns.
But that's not enough, said Mike Boyd, president and co-founder of aviation consultancy Boyd Group International: “Squawk Box Asia” Monday.
“The entire management board should be fired,” he said. “The new CEO and new people say they are doing something, but it is a very serious problem.”
Without aircraft supplies from Boeing, airlines such as Southwest, Wizz Air and Ryanair are spending money they “didn't want to spend on refurbishing planes that were about to retire,” Boyd said.
“Buckle up. “It's going to be a very bumpy year,” he said.
“Boeing will lose a lot of territory to our friends at Airbus. There's no doubt about it,” he said, adding that the company could become more of a “second-tier player” to Airbus in the future.
According to Reuters, U.S. Secretary of Transportation Pete Buttigieg said on Monday that Boeing has “a lot more” work to do.
“Changing the culture at Boeing is something we're really working on,” he said. “The only way to fully assess this will be to see whether the company can continually improve its performance.”
John Grant, chief analyst at aviation intelligence firm OAG, said measurable improvements at Boeing are unlikely to occur until late 2025.
“With regulators creeping across the business and new processes being established, it may be too early to say things are getting better,” he said. “The good news is that from an operational point of view the situation has not worsened.”
However, “finances and labor relations are a different issue,” he said.
Boeing hasn't posted an annual profit since 2018. The company suffered another production setback after mechanics started a seven-week strike that ended in November with employees providing a 38% incremental wage increase.
A Boeing spokesman told CNBC that the company is focused on stabilizing its operations and implementing its “Safety and Quality PlanThe spokesman highlighted more than a dozen actions taken by Boeing in 2024, from management changes and the acquisition of Spirit AeroSystems to the expansion of its South Carolina plant to increase production of 787 planes.
Except Boeing
The airline industry's problems 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 entire ecosystem of companies operating in the industry.”
“It has been a very difficult period and there is no indication that this problem will end anytime soon,” he said. “These are problems that will take years to solve, not 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 ray of positivity for the industry: “The worst of it is probably behind us.”
What does this mean for travelers?
Engine problems are forcing many airlines, including Hawaiian Airlines and Spirit Airlines, to ground parts of their fleets, Boyd said.
“There are no engines,” he said. “Wizz Air in the EU now grounded 40 planes for a year.”
This will make it more difficult to find deals on airline tickets in 2025, he added. “If you're looking for really cheaper tickets, I don't think even Mr O'Leary at Ryanair can promise you that,” he said, referring to Ryanair CEO Michael O'Leary.
Scott Keyes, founder of the air travel website Going, said airfares will likely increase in 2025. In a December 30 post, Keyes scratched how the costs of flying to, from and within the United States have changed since the Covid-19 pandemic.
- 2020: -17%
- 2021: -4%
- 2022: +36%
- 2023: -12%
- 2024: +5%
However, Sobie said capacity problems caused by grounded flights could be offset by an increase in flight numbers, particularly in the Asia-Pacific region where the industry is still recovering from the Covid pandemic.
He said airfares are normalizing at levels higher than pre-pandemic prices but below 2022 peak levels – but costs and supply chain issues remain unchanged. This year may see some improvement, he said, but “overall, these challenges remain.”