Now that air travel is booming again, we’re seeing a global plane shortage
To cope with the continued air travel boom, airlines are placing more and more jet orders.
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The backstory: When the pandemic swept the globe in 2020, it goes without saying that air travel took a dive, causing a tourism winter. Airlines were literally parking thousands of planes in different places worldwide – even deserts – just to find a place to store them. Now, with travel back in swing, some of these planes need heavy maintenance after being inactive for so long, or they may need to be phased out.
More recently: With China lifting its remaining COVID restrictions, demand for air travel is only expected to increase. And one thing is becoming increasingly obvious – we need more planes. But it's not just high demand causing the shortage. Supply chain challenges, such as labor shortages, also add to the issues. For example, aerospace manufacturer Airbus has had to drop its delivery goal for this year because of supply chain trouble. So what does this mean? Well, possibly increased airfares.
The development: Now, to cope with the continued air travel boom, airlines are placing more and more jet orders. Some carriers, including United Airlines and Air India, have put in hundreds of orders, but delivery might take years. In fact, planemaker giants Boeing and Airbus are sold out for their most popular single-aisle models until at least 2029, with a current estimated order backlog of 12,720 aircraft, according to Jefferies, an investment banking company.
Key comments:
"People got used to lower fares during the pandemic and China's reopening will make it worse," said Ajay Awtaney, the founder of LiveFromALounge.com. "It's not just a shortage of planes but also other factors like oil prices."
"We haven't gotten one airplane on time, whether it's a 737 Max or a 787 or an A330, A350," said Steve Udvar-Hazy, the founder of Air Lease Corp. "And the worst has been the A321neo. We've had delays of as much as six or seven months comparing contract delivery month to actual delivery. It's a combination of supply chain issues, ramping up too quickly and shortage of labor. Production workers can't work from home. So it's been a real problem."
"The order backlogs are big enough that a recession wouldn't really matter right now," said George Ferguson, an analyst with Bloomberg Intelligence.
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