Air carriers are facing shortages of aircraft, labour, and spare parts to meet the growing demand for travel worldwide.
Passengers will not see relief from skyrocketing airfares as carriers face shortages of aircraft, labour, and spare parts to meet growing travel demand. In a global aviation outlook report, ING Bank NV described an aviation industry suffering on several fronts due to ongoing supply chain issues.
Air travel will likely exceed pre-pandemic levels this year, but Boeing’s production problems and Pratt & Whitney engine defects limit aircraft availability and derail recovery.
According to an ING report, Airbus and Boeing have placed a record number of orders, and demand for used aircraft is rising. This is driving up aircraft leasing rates, especially for workhorses such as the Boeing 737 and Airbus A321. Meanwhile, a shortage of skilled workers means modernising or repairing older aircraft is also delayed.
Airlines worldwide are reviewing development plans and even cutting flights because of supply problems. In the Asia-Pacific region alone, Singapore Airlines, Qantas Airways, and Air New Zealand have faced delays in aircraft deliveries, unplanned engine maintenance and other problems.
‘The global aircraft fleet is not keeping up with demand, and it’s not over yet. Amid capacity constraints, the power over prices remains with the carriers,’ ING economist Rico Luman and credit strategist Alexei Soroka wrote in the report.
For now, passengers can pay the bills. The report said air fares are likely to remain high globally, with ticket prices in Europe already exceeding inflation by 15 per cent in early 2024.
‘People worldwide seem keen to travel and prioritise travel despite more expensive tickets,’ the report said.
Other key findings from the report:
- Delivery delays, additional maintenance, extreme weather, geopolitics and labour tensions are impacting airline profitability this year.
- Airline emissions this year are likely to be close to pre-pandemic levels. However, despite growing awareness about harmful aviation emissions, only some people want to give up flying, especially among the younger generation.
- India’s growing population and rising affluence will make the country ‘an engine for future airline growth.’
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