The aviation industry is predicted to have a challenging year, according to industry insiders.
Aviation consultants predict that the aviation industry will face another year of challenges in 2025, with delivery delays at Boeing and supply chain issues continuing to impact the industry.
One year has passed since a Boeing 737 Max 9 operated by Alaska Airlines experienced a door panel blow-off, sparking renewed concerns about Boeing's quality and safety procedures.
The company has implemented changes such as mandatory workforce training, increased inspections, and an improved "Speak Up" system to encourage employees to report workplace concerns, according to a company statement published Friday.
Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International, stated on "Squawk Box Asia" Monday.
""The CEO and new board members claim they're addressing the issue, but it's a significant problem," he stated."
Airlines such as Southwest, Wizz Air and Ryanair are spending money they "had not wanted to spend to overhaul airplanes they were going to retire," Boyd said.
"Brace yourself for a turbulent journey," he warned.
According to him, Boeing will lose a significant amount of market share to Airbus, and may become a "secondary player" in the future.
According to Reuters, Boeing has "much more" work to do, as stated by Pete Buttigieg, the U.S. transportation secretary, on Monday.
""Assessing the culture change at Boeing requires consistent improvement in results," he said."
According to John Grant, the chief analyst at OAG, it is unlikely that Boeing will see tangible improvements before the end of 2025.
"Although new processes are being implemented and regulators are closely monitoring the company, it may be premature to say that things are improving. However, from an operational standpoint, things have not deteriorated."
He mentioned that the financials and labor relations are another matter.
Since 2018, Boeing has not reported an annual profit. The company experienced another setback in production following a seven-week strike initiated by its machinists in November, which resulted in workers receiving a 38% incremental wage increase.
Boeing is concentrating on stabilizing its business and executing its "Safety and Quality Plan," as stated by a Boeing spokesperson to CNBC. The spokesperson emphasized the 12 actions that Boeing took in 2024, including leadership changes, acquiring Spirit AeroSystems, and expanding its South Carolina site for increased production of 787 aircraft.
Beyond Boeing
The aviation industry has issues that extend beyond Boeing, according to independent analyst Brendan Sobie of Sobie Aviation.
He stated that the entire ecosystem of companies surrounding the industry is affected by spare part shortages and engine maintenance.
"This period has been challenging, and it seems like it will continue for a long time," he stated. "These issues will require time to resolve, not just a year."
Engine-makers Pratt & Whitney and Rolls-Royce are causing airlines significant frustration due to reliability and maintenance issues, according to Sobie.
He expressed a glimmer of positivity for the industry regarding the issues at Pratt & Whitney, stating that "it is likely that the worst is behind us."
What this means for travelers
Many airlines, including Hawaiian Airlines and Spirit Airlines, are grounding portions of their fleet due to engine problems, according to Boyd.
"Wizz Air in the E.U. grounded 40 airplanes for the year," he said, "and the engines aren't there."
It will be more challenging to find affordable airfare deals in 2025, according to the speaker.
Scott Keyes, the founder of the air travel website Going, predicted that airfares are likely to rise in 2025. In a post on Dec. 30, Keyes detailed the changes in flight costs to, from, and within the United States since the Covid-19 pandemic.
- 2020: -17%
- 2021: -4%
- 2022: +36%
- 2023: -12%
- 2024: +5%
Grounded flights may cause capacity problems, but an increase in flights, particularly in Asia-Pacific, may offset these issues as the industry recovers from the Covid pandemic.
Despite airfares normalizing at a level above pre-Covid fares but below 2022's peak levels, costs and supply chain issues are not improving. This year may bring some improvement, but "overall, these challenges still remain."
Business News
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