Stock Markets

Airline capacity constrained until 2025 due to delivery delays, spare parts -IATA

© Reuters. FILE PHOTO: Global airline industry body International Air Transport Association (IATA) Director General Willie Walsh attends an interview with Reuters in Doha, Qatar, June 19, 2022. Picture taken June 19, 2022. REUTERS/Imad Creidi

DUBLIN (Reuters) – Global airline capacity will be lower than expected this year and stay constrained until 2025 at the earliest, warned IATA director general Willie Walsh, due to delays in new aircraft deliveries and a lack of availability of spare parts.

“I can’t see anything really improving or significantly improving probably until 2025 at the earliest and it may even go beyond that,” Walsh told Reuters on the sidelines of a conference in Dublin on Wednesday.

Airlines, hoping to put years of pandemic restrictions behind them, expect travel demand to recover to 2019 levels and above this year, but the lack of planes to meet demand could put a brake on growth.

Aircraft manufacturers Boeing (NYSE:BA) Co and Airbus are feeling widespread pressure from bottlenecks in supply chains and that is leading to delivery delays, while Walsh said that airline bosses were also telling him there were not enough spare parts, particularly for engines.

“It means capacity will be slightly lower than the industry had forecast,” Walsh said, adding that he would expect the reduction for this year to be in the low single digits range.

Last week, Boeing announced a fresh supplier-related halt to 737 deliveries while industry sources have said Airbus has started notifying airlines about delivery delays in 2024 for its best-selling A320neo family of jets.

Ryanair, Europe’s biggest airline, warned on Wednesday it would trim its July schedule because it expects around 10 Boeing 737 MAX aircraft to be delayed due to manufacturing issues.

Walsh said he did not expect chaos at airports this summer. Last year, labour shortages and the sudden uptick in demand after COVID-19 in Europe forced airlines to cancel large numbers of flights and scale back capacity.

“I don’t think it’s going to be a mess because I think what we’re seeing now is airlines adjusting their capacity early enough to face these last-minute problems,” he said.

Asked about the prospects for sustainable aviation fuel, which airlines are counting on to meet net-zero targets, Walsh said that Europe was set to lose out to the United States due to the incentives provided by the Inflation Reduction Act.

Australia stocks higher at close of trade; S&P/ASX 200 up 0.07%

Previous article

Gold up 9% for 2 quarters in row as safe haven and risk both shine

Next article
As a seasoned financier, I have a keen eye for identifying profitable investment opportunities and creating strategic financial plans. My expertise in risk management and financial analysis has enabled me to deliver exceptional returns for my clients and stakeholders.

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *