DUBAI — When airline executives from around the world gathered last year in Istanbul for IATA’s Annual General Meeting, supply chain constraints that were slowing aircraft deliveries were perhaps their biggest concern.
A year later at this year’s Annual General Meeting, industry leaders say little has changed.
“The best thing I can say about the supply chain exasperations of the last year is that they appear to have not gotten worse,” IATA director general Willie Walsh said during his annual state-of-the-industry speech.
IATA expects the total number of 2024 commercial flights worldwide to be 38.7 million this year, 1.4 million less than the estimate put out by the trade group in December, a decrease attributable to aircraft delivery delays.
Furthermore, there are now 1,583 aircraft deliveries scheduled for this year, 11% less than just a few months ago.
For the first quarter, Airbus delivered 142 planes, an increase from 127 last year. But crisis-plagued Boeing’s deliveries plunged to just 83 from 130 in last year’s Q1 amid increased scrutiny of its 737 narrowbody program.
Engines are another constraint. New-generation engines from GE and Pratt & Whitney have proven less reliable than their previous engines. And increased engine-repair workloads are taxing maintenance shops and straining the market for spare parts, IATA says. Similarly, aircraft delivery delays have resulted in airlines using existing aircraft longer, which is straining the parts market.
Industry insiders have differing views about whether supply shortage will ease first for engines or for airframes, though an end doesn’t appear to be imminent for either one.
“There is a school of thought that says we are closer to the end of the engine challenges than we were last year,” said Vik Krishnan, an aviation-focused partner for consulting firm McKinsey. “But the airframe [shortage] still hasn’t gotten that much better — both on widebody and on narrowbody.”
United CEO Scott Kirby said the industry’s supply chain woes appear to have bottomed out, though they have yet to improve. He said he worries that the engine problem might be the most intractable.
“If you want to solve a problem, first you have to acknowledge a problem,” Kirby said, striking an optimistic tone. “There’s a broad acknowledgement of the problems and that means we can get them solved.”
Lufthansa Group CEO Carsten Spohr sounded more pessimistic as he called supply chain issues a huge problem for the industry.
“I don’t think it’s going to recover very quickly,” Spohr said.
