Some carriers are trimming their schedules to cope with the lack of available planes.  File
| Photo Credit: Reuters

The global airline industry is facing a summer squeeze, with travel demand expected to surpass pre-pandemic levels while aircraft deliveries have dropped due to production problems at Boeing and Airbus.

Air carriers are spending billions on repairs to keep flying older, less fuel-efficient jets, and paying a premium to secure aircraft from lessors. However, some carriers are trimming their schedules to cope with the lack of available planes. At the same time, the number of travellers globally is set to hit historic levels, with 4.7 billion people expected to travel in 2024 compared with 4.5 billion in 2019.

Passenger carriers to receive fewer aircraft

“We can expect a strong performance from airlines throughout the summer with some particularly high airfare,” said John Grant, senior analyst at travel data firm OAG.

Last December, the International Air Transport Association (IATA) predicted a 9% annual growth in global airline capacity this year. That estimate looks optimistic following Boeing’s safety crisis.

Passenger carriers will receive 19% fewer aircraft this year than expected because of production issues at Boeing and Airbus, said Martha Neubauer, senior associate at AeroDynamic Advisory.

U.S. carriers will receive 32% fewer aircraft than planned a year ago because several airlines depend on Boeing’s 737 MAX planes, Ms. Neubauer said. Boeing’s production has been curbed after a January mid-air panel blowout.

The company is reeling from a sprawling crisis that erupted after the Jan. 5 Alaska Airlines blowout. Regulators have put a cap on the production of the 737 MAX, but the company is not hitting even that level.

As many as 650 Airbus A320neo jets could be grounded in the first half of 2024 for inspections to deal with a flaw with RTX Corp’s Pratt & Whitney engines, RTX said last year.

In Europe, low-cost airline Ryanair has cut some routes. In the United States, United and Southwest have cut back flying and adjusted hiring and staffing plans.

Aircraft leasing market is booms

Analysts expect capacity at most U.S. carriers in the second quarter to grow at a slower pace than a year ago. Airlines will update their growth plans and explain how they will offset capacity constraints when they report quarterly results, starting on Wednesday with Delta Air Lines.

Due to the shortage of new planes, the aircraft leasing market is booming. Data from Cirium Ascend Consultancy shows that lease rates for new Airbus A320-200neo and Boeing 737-8 MAX aircraft have hit $400,000 per month, the highest since mid-2008.

Airlines are spending 30% more on aircraft leases than before the pandemic, said John Heimlich, chief economist at Airlines for America (A4A) that represents major U.S. carriers.

They are also holding on to jets that are past their useful economic lives and require heavy maintenance that now takes several months, Mr. Heimlich said. Repair costs at United, Delta and American were up 40% last year from 2019.

Increased leasing, repair and labour costs will bite into profit despite the high demand, Mr. Heimlich said. U.S. passenger airlines posted a pretax margin of 4.5% last year, with the bulk of contribution coming from Delta and United.

Fewer Americans are planning to travel on a plane this summer compared with a year ago due to high inflation, a survey by travel website the Vacationer showed. Airline fares are down year-on-year, but have been rising month-on-month.

Paris:

Last year was the safest ever for commercial air travel, despite a massive rebound in passenger flights, an airline industry group said Wednesday.

The only fatal accident of a passenger plane was the crash of an ATR turboprop operated by Nepal’s Yeti Airlines during a domestic flight, killing 72 people, according to the International Air Transport Association’s (IATA) annual report.

The IATA said it counted another 29 accidents in 2023 that did not involve fatalities or loss of the plane. 

In 2022, there was a total of 42 accidents, of which five were fatal and took 158 lives. 

The IATA counts a non-fatal accident as an event that causes damage of at least $1 million or equal to 10 per cent of the plane’s value.

IATA statistics do not cover business, military, private, maintenance or training flights.

The IATA said, “2023 saw the lowest fatality risk and ‘all accident’ rate on record.”

“On average a person would have to travel by air every day for 103,239 years to experience a fatal accident.”

The low crash rate came despite the number of flights last year rising 17 per cent to 37.7 million, the IATA said.

The IATA represents some 320 airlines comprising 83 per cent of global air traffic.

“Even if flying is among the safest activities a person can do, there is always room to improve,” said IATA Director General Willie Walsh, citing “two high-profile accidents in the first month of 2024.”

In January, a Japan Airlines A350 Airbus was safely evacuated after bursting into flames at a Tokyo airport.

In the United States, a panel blew off the fuselage of a Boeing 737 MAX during an Alaska Airlines flight, again without any serious injuries. 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)