30% Increase in Leasing Costs Due to New Aircraft Delays
As the summer vacation travel demand surges, major foreign media reported on the 9th that the global aviation industry is expected to face difficulties due to delivery delays of Boeing and Airbus aircraft.
With new aircraft deliveries delayed, airlines are spending billions of dollars on repairs to continue operating old and fuel-inefficient aircraft, and paying additional costs to lease aircraft. Meanwhile, the number of travelers worldwide is expected to reach an all-time high this year.
In December last year, the International Air Transport Association (IATA) forecasted that global air transport capacity would increase by 9% annually this year. However, following successive Boeing safety incidents, this estimate is being criticized as overly optimistic.
Martha Neubaeur, Senior Associate at Aerodynamic Advisory, said, "Due to production issues with Boeing and Airbus, airlines will receive 19% fewer aircraft than expected this year," adding, "Several U.S. airlines rely on Boeing 737 Max aircraft, so they will receive 32% fewer aircraft than planned a year ago."
Since the in-flight panel explosion accident of Alaska Airlines' Boeing 737 Max 9 passenger plane on January 5 this year, the U.S. Federal Aviation Administration has been limiting Boeing's production volume.
In Europe, low-cost carrier Ryanair has reduced some routes. In the U.S., United Airlines and Southwest Airlines have cut flights and adjusted their workforce.
Due to the shortage of new passenger aircraft supply, the aircraft leasing market is booming. According to Cirium Ascend Consultancy, the monthly lease rates for Airbus A320-200neo and Boeing 737-8 Max aircraft have reached $400,000 (approximately 542 million KRW), the highest since mid-2008.
John Heimlich, Chief Economist at A4A, stated that airlines are spending 30% more on aircraft leasing costs than before COVID-19. He also mentioned that airlines hold passenger aircraft that have reached the end of their economic life and require extensive maintenance that takes several months. Repair costs for United, Delta, and American Airlines rose 40% compared to 2019. Heimlich explained, "Although air travel demand has increased, profits will decrease due to rising leasing, repair, and labor costs."
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