Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

NEWS

Financiers grapple with plane shortages amid Boeing MAX crisis

By Tim Hepher and Padraic Halpin

DUBLIN (Reuters) -Airlines face years of plane shortages, driving up costs and setting the stage for higher fares, as increased oversight in the wake of a Boeing 737 MAX 9 cabin blowout exacerbates delays caused by weak supply chains, industry officials said.

The warning came as aircraft lessors, bankers and airlines met in Dublin – home to a booming global air finance sector – for the first time since the Alaska Airlines incident on Jan. 5 led to a partial grounding and pushed Boeing into a new safety crisis.

For months, aviation has been struggling to keep pace with a post-pandemic travel boom amid labour and parts shortages.

But widespread outrage over the near disaster that led to an emergency landing with a gap in the side of an aircraft, but no major injuries, has added a new layer of regulatory risk.

“Demand is more or less a slam dunk; the question is when does the supply catch up?” Rob Morris, head of global consultancy at Ascend by Cirium, told Reuters as delegates gathered for the week-long Airline Economics conference.

“We have estimated 2026 or 2027, but there must be a risk on the downside now because of the MAX.”

The U.S. Federal Aviation Administration last week took the unusual step of ordering Boeing to stop increasing 737 MAX production until quality control concerns highlighted by the discovery of loose bolts in the fleet were addressed.

Successive safety crises over Boeing’s fastest-selling model, following MAX crashes in 2018 and 2019, have prompted regulators to tighten control over development and now production.

That comes at a time when Airbus and Boeing are trying to increase production to cope with a surge in demand.

That is potentially good news for leasing companies that have already placed big plane orders and will now secure a bigger return as airlines rush to lease planes. But many are also struggling to get their own new planes delivered on time.

For airlines it could mean a gap in receiving new technology needed to lower costs and reduce emissions, as well as higher lease rates. That in turn could lead to higher fares.

Air Lease Executive Chairman Steven Udvar-Hazy warned broader supply challenges would continue and expressed doubts that Airbus would meet a target to sharply increase output to 75 single-aisle jets a month in 2026.

“I think certifying any new airplane nowadays is going to be much more costly and will take a longer period of time. And I don’t think the industrial base, the supply chain right now is really ready to be able to support a brand new airplane design,” Udvar-Hazy told the conference.

An Airbus executive defended the group’s target while a spokesperson declined comment ahead of upcoming earnings.

(Additional reporting by Conor Humphries, Valerie Insinna and David Shepardson; Editing by Bernadette Baum and Mark Potter)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts