The first strike for Boeing in 16 years is poised to exacerbate the already critical global shortage of jetliners, potentially pushing up airfares and forcing airlines to keep older aircraft in service longer.
Industry experts have raised concerns over the potential impact of this strike on the aviation sector, which is already grappling with supply chain constraints and high demand, the Reuters reported.
The strike began on Friday at midnight, as Boeing’s West Coast workers rejected a proposed contract deal. This work stoppage has resulted in the suspension of production of Boeing’s 737 MAX jets, a key model for the US planemaker. The situation has sparked warnings from analysts and industry executives about possible repercussions for airlines and travellers worldwide.
Potential Impact on Global Aviation
Ross O’Connor, Chief Financial Officer of Irish leasing company Avolon, emphasised the importance of Boeing in global aviation. “Boeing is a systemically important company for global aviation,” he said. A prolonged strike “could have an impact on production levels, which could exacerbate some of the supply shortages that are in the market at the moment.”
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Boeing Chief Financial Officer, Brian West, also warned that the strike could hinder output and potentially “jeopardize our recovery.” Airlines are already facing challenges in expanding capacity to meet growing demand due to a shortage of parts, recruitment problems, and overwhelmed maintenance facilities.
Rob Morris, Global Head of Consultancy at Cirium Ascend, noted, “It’s going to be a significant amount of time before we see that balance. I’m starting to evolve the hypothesis that it won’t be (extra) supply that corrects it, but instead a softening of demand.”
Rising Airfares and Aging Fleets
With high airfares on the rise, aviation economist Adam Pilarski of AVITAS consultancy warned, “When ticket prices go up, then all other things being equal, you have lower traffic levels.” This suggests that while high fares may benefit airlines in the short term, they could accelerate a downturn in demand.
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The ongoing strike could also impact the efforts of European rival Airbus, which is already struggling to meet its delivery targets due to supply chain issues. Airbus CEO Guillaume Faury expressed optimism about meeting a recently lowered goal of 770 deliveries this year. However, analysts remain skeptical about whether the company will comfortably surpass last year’s figure of 735 deliveries.
As production delays persist, airlines are increasingly relying on older jets. The average age of the global single-aisle jet fleet now stands at 11.3 years, up from 9.1 years during the pandemic, according to Cirium data. This trend has implications for environmental sustainability, as older jets typically emit more CO2 than newer, more fuel-efficient models. “It must mean that we’re burning more CO2 than we should be because we’re using more old aircraft,” Morris pointed out.
The Road Ahead for Airlines
With limited options, airlines and leasing companies are being forced to keep existing jets flying longer. The strike could further disrupt the industry’s efforts to modernize fleets and reduce carbon emissions. Despite these challenges, the airline industry remains committed to achieving net zero emissions by 2050.
