The aviation industry is going to have another tough year driven by Boeing delays

The aviation industry is bracing for another year of turmoil as delivery delays at Boeing and supply chain problems are set to continue into 2025, aviation consultants say.

Sunday marked one year since a door panel blew off a Boeing 737 Max 9 operated by Alaska Airlines, an event that reignited a firestorm of questions about Boeing’s quality and safety standards.

Since then, the company instituted a series of changesincluding mandatory workforce training and increased inspections, according to a company statement released on Friday. Boeing also said it has improved its “Speak Up” system to encourage employees to report workplace issues.

But that’s not enough, said Mike Boyd, president and co-founder of aviation consulting firm Boyd Group International.Squawk Box Asia” Monday.

“The entire board of directors should be fired,” he said. “The new CEO and the new people here say they’re doing something, but this is such a deep problem.”

Without deliveries of planes from Boeing, airlines like Southwest, Wizz Air and Ryanair are spending money they “didn’t want to spend to overhaul planes that were going to be retired,” Boyd said.

“Watch your belt. It’s going to be a very bumpy year ahead,” he said.

“Boeing will lose a lot of territory to our friends in Airbus. There is no question,” he said, adding that the company can become more than a “secondary player” to Airbus in the future.

Pete Buttigieg, the US transportation secretary, said on Monday that Boeing has “a lot more” work to do, according to Reuters.

“Culture change at Boeing is something that is a real work in progress,” he said. “The only way to fully evaluate it will be to see that they can constantly improve the results.”

John Grant, chief analyst at aviation intelligence firm OAG, said tangible improvements at Boeing are unlikely to come before the end of 2025, at the earliest.

“With regulators crawling across the company and new processes being put in place, it’s perhaps too early to say things will improve,” he said. “The good news is that things haven’t gotten any worse from an operational perspective.”

However, “financial and labor relations are another issue,” he said.

Boeing has not made an annual profit since 2018. The company suffered another production setback after its machinists started. a seven-week strike that ended in November with workers securing a 38% incremental wage increase.

A Boeing spokesperson told CNBC that the company is focused on stabilizing the business and implementing its “Safety and Quality Plan. ” The spokesperson highlighted a dozen actions that Boeing has taken in 2024, from leadership changes to its board and the acquisition of Spirit AeroSystems to the expansion of its South Carolina site for increased production of its 787 planes.

“The engines aren’t there,” he said. “Wizz Air in the EU only the ground 40 planes for the year”.

That will make deals on airline tickets harder to find in 2025, he said. “If you’re looking for really cheap fares, I don’t think even Mr. O’Leary of Ryanair can promise that,” he said, referring to Ryanair CEO Michael O’Leary.

Scott Keyes, founder of the air travel website Going, said that airfares will likely increase in 2025. In a post on December 30, Keyes outlined how flight costs to, from and within the United States have changed since the Covid-19 pandemic.

• 2020: -17%
• 2021: -4%
• 2022: +36%
• 2023: -12%
• 2024: +5%

However, Sobie said that the capacity problems caused by ground flights can be offset by an increase in flights, especially in the Asia-Pacific, where the industry is still recovering from the Covid pandemic.

He said Airline prices have normalized to a level above pre-Covid rates but below 2022 peak levels – however, costs and supply chain issues are not. This year may bring some improvement, he said, but “in general, these challenges still remain.”