Why Boeing's woes could push up airline prices for consumers

Release time：2024-05-21 10:23:46 Source：Stellar Scope news portal

Boeing's problems since the United Airlined door blowout have been constant - now travelers face cancelled routes and fare hikes this summer.

Since a door plug blew out of a Boeing 737 Max during an Alaska Airlines flight in January, Boeing has lurched from crisis to crisis - and it stock has fallen by a quarter.

While they investigate what went wrong, Federal investigators have capped the production of 737 Max aircraft - which means US airlines will not get all the planes expected ahead of the summer.

A shortage of aircraft mean airlines will not be able to offer as many flights, an expert says. It also means prices will rise as demand for remaining flights goes up. 

So far this year, Boeing has delivered only 42 planes to customers despite facing a backlog of more than 4,700 orders. 

The Federal Aviation Administration capped production of the 737 Max due to safety concerns

Southwest previously expected 79 737 Max aircraft this year but that forecast was cut to 46

US airlines typically deploy the Boeing 737 Max for domestic flights, as well as some international routes to destinations in North America, Central America and the Caribbean.

So far this year, Boeing has delivered only 42 planes to customers despite facing a backlog of more than 4,700 orders.

US airlines expecting 737 Max deliveries 

United - 349 unfilled orders

Southwest - 483 unfilled orders

Alaska Airlines - 80 unfilled orders

Delta - 100 unfilled orders

American Airlines - 71 unfilled orders

Source: Boeing filings 

'Consumers may not have as many flights, and airlines won't be able to offer as many flights,' Henry Harteveldt, an airline analyst with Atmosphere Research Group, told CBS MoneyWatch.

'Airlines are intimating that summer demand looks good, and that to me suggests that airfares would be higher anyway,' Harteveldt added.

'But obviously, when an airline doesn't have all the aircraft it expects to have and thus can't operate all the flights with all the capacity, there's a chance airfares would be higher than they otherwise would have been.'

Southwest Airlines - one of the biggest buyers of the 737 Max - last week said in a filing that Boeing had previously advised that it would deliver 79 planes this year but cut that forecast to just 46.

Earlier this month, United told staff in an internal memo seen by CNBC that they would pause the hiring of new pilots until May and June 'due to continued new aircraft certification and manufacturing delays at Boeing.'

'As you know, United has hundreds of new planes on order and while we remain on a path to be the fastest growing airline in the industry, we just won't grow as fast as we thought we would in 2024 due to continued delays at Boeing,' wrote executives. 

A Boeing 787 flying from Sydney to Auckland took a terrifying plunge last week after a flight attendant serving a cockpit meal inadvertently hit a switch on the pilot's seat

United was expecting 43 Boeing 737 Max 8 and 34 Max 9 models this year, but now expects just 37 and 19 of them, respectively, according to a company filing.

It also told Boeing to stop making 737 Max 10 jets it had previously ordered.

Meanwhile Ryanair was expecting 57 aircraft by June, but is now only expected to receive 40. CEO Michael O'Leary said recently he was 'very disappointed at these latest Boeing delivery delays' ahead of the summer travel peak.

As a result the airline said it would be forced to make 'minor schedule changes' that would reduce frequencies on existing routes.

Boeing's problems got worse last week after a 787 Dreamliner flying to New Zealand was sent into a plunge after an issue with the pilot's chair caused them to collapse onto the controls.

On Friday, another United Airlines plane built by Boeing was grounded after it was found to be missing a panel after it touched down following a flight.

The plane is a Boeing 737-824, and successfully touched down in Medford Airport in Oregon despite the missing part.

No injuries were reported, Jackson County Airport Director Amber Judd said, adding the flight had originated from San Francisco.

She reiterated the plane was not a new aircraft, unlike the slew of incidents seen in recent months.

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