Supply chain woes threaten Boeing, Airbus deals

Boeing and Airbus celebrated major deals totaling billions of dollars at Asia’s largest airshow in Singapore this week. However, the optimism surrounding the orders is dampened by looming challenges in supply chain disruptions, potentially delaying deliveries of the purchased planes.

One of the significant transactions included Thai Airways committing to acquiring 45 Boeing 787 Dreamliners, with Royal Brunei Airlines purchasing four of the coveted model. Meanwhile, Airbus secured a commitment from Vietjet Air to buy 20 A330-900 aircraft, set for delivery starting in 2026.

Despite the excitement, industry experts caution that the aircraft manufacturers are already struggling to meet existing orders due to shortages in skilled labor and critical parts. Analyst Shukor Yusof highlighted that both Boeing and Airbus had hinted at the unavailability of popular models until 2030, citing ongoing challenges in logistics, raw material shortages, and energy costs.

“The new orders will struggle to be delivered as continued shortages in labor and raw materials, problems in logistics, as well as energy costs prevail,” said Shukor, founder of consultancy Endau Analytics. “Raising production rates will be very tough to achieve. You’re not making hand phones.”

This delay in deliveries poses challenges for airlines, restricting their ability to offer more seats and leaving them with older, less fuel-efficient planes, potentially impacting their profitability.

The disruptions in the supply chain are traced back to the pandemic, which caused widespread restrictions, border closures, and subsequent disruptions in the shipment of raw materials. The war in Ukraine added to the complications, impacting oil supplies and triggering increased global costs for goods and services.

As air travel resumed with pent-up demand post-Covid-19, the industry faced a surge, overwhelming manufacturers, airlines, airports, and suppliers. Brendan Sobie, an analyst with Sobie Aviation, emphasized that the supply chain has become a “major bottleneck,” causing delays in aircraft deliveries and maintenance.

Both Boeing and Airbus highlighted the extensive number of parts and suppliers involved in building a single aircraft, with the former stating that each 787 Dreamliner requires around 2.3 million parts.

International Air Transport Association director-general Willie Walsh expressed the likelihood of supply chain issues persisting for several more years. Labor shortages add another layer of complexity, with the industry requiring a significant number of pilots, maintenance technicians, and cabin crew members over the next two decades.

Airlines, such as Cebu Pacific, are feeling the impact directly, with the CEO Michael Szucs revealing that the carrier had to ground planes due to engine problems and delays from Airbus. “It’s just never been more difficult to keep the fleet flying,” Szucs commented at the airshow.

In conclusion, while the airshow marked monumental deals for Boeing and Airbus, the shadow of supply chain challenges threatens the timely delivery of these aircraft, presenting a substantial hurdle for an industry grappling with post-pandemic recovery

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