The Boeing and Airbus Crisis: Airlines Face Delays and Supply Chain Constraints

The aviation industry continues to grapple with the latest crisis faced by Boeing. Delays have become a recurring issue for both Boeing and its rival Airbus due to supply chain constraints. Boeing’s troubles have been particularly focused on its star plane, the 737 MAX, which has experienced difficulties over the past year. In January, a major in-flight safety incident occurred on Alaska Airlines, putting further strain on Boeing’s reputation. As a result, the Federal Aviation Administration (FAA) has frozen Boeing’s plan to ramp up MAX production until 2025, adding to the already delayed delivery timetable. Furthermore, Airbus, although not plagued by comparable safety issues, faces its own major headache with engine problems. The engines, built by Pratt & Whitney, a unit of RTX, require inspections and potential fixes, causing significant disruptions for airlines.

Boeing’s customers are beginning to explore other options, including potentially moving their orders to Airbus. Notably, Alaska Airlines, which has been exclusively supplied by Boeing, had been considering orders of the Boeing 737 MAX 10 before the safety incident. However, with its pending acquisition of Hawaiian Airlines, which already uses Airbus planes, Alaska Airlines CEO Ben Minicucci indicated they are open to considering alternative suppliers. American Airlines CEO Robert Isom echoed this sentiment, emphasizing that Boeing needs to improve its performance. Isom stated that regardless of the manufacturer, reliability and safety are of utmost importance.

Challenges of Changing Plane Suppliers

Switching plane suppliers is not a simple process for airlines. They must secure a spot in the order book of a manufacturer, and suppliers must ready their supply chains for executing multi-plane orders over extended periods. At present, this is a challenging task due to the strained production capacity of both Boeing and Airbus. Airbus’s production infrastructure is fully booked until 2030 for single-aisle planes (A320 line) and until 2028 for long-distance jets (A350). Christian Scherer, CEO of Airbus’s commercial aircraft business, highlighted the need to deliver 8,600 planes on time and ready to fly. While Airbus plans to increase A320 production to 75 per month by 2026, airlines are signing contracts for jets that won’t be delivered for several years. Despite the lengthy timeframe, Airbus continues to receive a high volume of orders, driven by airlines renewing their fleets to meet emission targets by 2050.

Boeing’s US rival continues to face persistent scrutiny, with questions surrounding quality control and certification for its 737 MAX models. The Alaska Airlines incident involving the 737 MAX 9 raised concerns about quality control. Additionally, Boeing has yet to receive certification for the smaller 737 MAX 7 and the larger MAX 10 models. The uncertainty surrounding these models has prompted airlines to revise their schedules. Despite these challenges, both Boeing and Airbus boast robust order books, with Boeing receiving more than 4,000 orders across the MAX program and Airbus recording a record-breaking 2,094 net new orders in 2023. However, next available order slots for 737s are estimated to be toward the end of the decade, according to Boeing.

Both Boeing and Airbus face ongoing challenges due to constrained supply chains, a problem that has persisted since the height of the pandemic. A senior analyst at Third Bridge, Christopher Raite, notes that the supply chain is unable to support the desired level of production ramp-up. Additionally, there is a supply crunch for critical metals, particularly from Russia and Ukraine, further exacerbating the situation. As a result, airlines may consider alternative solutions such as renting jets to mitigate the impact of delays in receiving planes from both Boeing and Airbus.

The aviation industry faces significant hurdles as both Boeing and Airbus grapple with their respective crises. Delays, supply chain constraints, and safety concerns have put pressure on the manufacturers and airlines alike. The search for alternatives and the challenges of changing suppliers only further complicate the situation. It remains to be seen how the industry will navigate these obstacles and find solutions to meet the growing demand for air travel in the coming years.


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