Aircraft delivery delays are stunting growth, but there's a silver lining

Travel Weekly

2 days ago

NEW DELHI, India -- The backlog for commercial airline orders is currently more than 17,000 planes, according to IATA, as aircraft makers continue to fall short of production targets.
It's a backlog of 14 years at current production rates.
The backlog is constraining industry growth and increasing the age of fleets, officials said during IATA's Annual General Meeting here. The industry's average aircraft age has increased from 13 years in 2015 to 15 years currently.
This year, Boeing and Airbus had forecast 1,430 deliveries, according to airline industry data company Cirium, but through the first four months of the year they had delivered just 359 planes.
"It's very unpredictable. You order an aircraft today, your guess is as good as mine when you're going to receive it," said Nick Careen, IATA's senior vice president of operations, safety and security.
The industry's annual fleet replacement rate is just half of the 5% to 6% that it was in 2020, IATA director general Willie Walsh said. Walsh criticized manufacturers for not making faster progress on supply chain problems that he said could last until the end of the decade. A variety of issues have contributed to supply challenges, including a shortage of skilled labor and titanium sourcing problems, Careen added.
A shortage of spare parts and aircraft grounded for inspections of Pratt & Whitney GTF engines have exacerbated the shortfall.
IndiGo CEO Peter Elbers, whose airline currently has a narrowbody order book of nearly 1,000 Airbus planes plus 60 widebody orders, said delivery delays and shortfalls are hurting the airline industry.
"I would say it's a missed opportunity in terms of addressing the market demand," he said.
But not everybody agrees.
Steve Saxon, a partner and aviation industry analyst for the consulting firm McKinsey, said delivery delays have been a blessing for airlines, driving up yields and profitability by preventing them from growing too fast.
Last year, the airline industry recorded a net profit of $32.4 billion, according to IATA.
Walsh, too, acknowledged that the slow delivery pipeline has a silver lining. Last year, airlines filled 84% of their seats, a record.
"I didn't think I'd ever see load factors at that level," he said.