The demand for commercial flights continues to grow unabated, despite efforts to push other transport modes. World passenger traffic closed 2023 up by 36.9% from the previous year, according to Hosteltur. The trend is clear, and airlines are eager to keep that momentum. But there is a catch: there aren’t enough airplanes. At least, not enough to meet demand.
Around Spain, the IAG group — owner of Iberia, Iberia Express, British Airways, Vueling, Aer Lingus, and Level — downplays the issue. Sources consulted by assets say that, for now, all pending orders with Boeing and Airbus do not show relevant delays. In 2024 the group is awaiting 20 aircraft deliveries.
Ryanair, meanwhile, has been more critical about the situation. This summer, the airline expected to receive around 57 aircraft to strengthen its operation in the peak season. However, the delivery forecast has been reduced by more than ten units. They will receive between 40 and 45 aircraft. To cope with the situation, Ryanair plans to cut frequencies rather than routes, prioritizing destinations at airports with higher fees, such as Dublin, Milan, or Portugal.
The company accepts that this setback may lead to an adjustment in its global outlook, though the forecast remains positive. “We will maintain our growth momentum, with traffic projections 10% to 15% above last summer. We will continue expanding in Spain, with 106 aircraft based at 27 airports, 12 of them as bases, and expanding operations even at smaller airports,” Ryanair confirms.
Global Snapshot
The total number of aircraft worldwide stands at about 29,000. Yet there are 14,800 orders awaiting fulfillment. In other words, current demand already mirrors half of the active fleet. And it is unlikely that the two global manufacturers, Boeing and Airbus, will be able to satisfy all the orders. Boeing, American, and Airbus, European, posted an 11% drop in revenue in 2023 versus the prior year.
Forecasts show that in 2019, 1,800 planes were delivered. In 2023, 1,400 commercial aircraft reached operators, with 735 of them from Airbus, which aims to deliver 800 this year. Boeing, after multiple safety incidents, is limited to a maximum of about 38 airplanes per month, allowing at most 456 deliveries. In total, that would be 1,191 units. The gap still stands at 13,609 aircraft.
What about prices?
Industry experts admit that these dynamics won’t help prices fall. Pere Suau, professor of economics and business studies at the Open University of Catalonia, who specializes in air transport, notes that it is hard to gauge how much prices could rise. About 70% of global airliner demand is for smaller, commercial aircraft. If new planes do not come in, airlines have fewer seats to offer, he emphasizes.
Spain’s ALASpain reiterates that while Holy Week seems to look manageable, the summer will be tougher. Boeing’s production has sagged due to trouble with its aircraft, and Airbus is facing engine-manufacturer delays. For peak dates, a sense of aircraft scarcity may already be felt. Airlines are navigating that situation, with potential upward pressure on ticket prices, according to industry sources.
Industry shifts
Another possibility is that airlines will have to buy aircraft at higher prices due to tighter supply and strong demand. Much of this information remains confidential. Boeing, facing ongoing issues, has reportedly offered discounts to sell planes. As a result, the industry could be altered in ways that concentrate influence on Airbus and other players in the sector.
In short: the industry is undergoing changes that point to gradual ticket-price increases in the coming years. The key, says the expert, is how demand will respond. As of today, prices are rising while demand remains robust. The big question is where the red line will be drawn. Some segments of the population may be forced to curb travel.
Are routes secure?
Responses vary on whether the situation will affect routes. Ryanair has already stated it will try to avoid reducing routes, though frequencies may drop. Conversely, fewer aircraft do not necessarily mean fewer destinations, notes Pere Suau. It could simply mean fewer seats to certain markets. Airlines’ strategies shift with the seasons, placing aircraft where they expect the best returns.
Industry sources explain that routes will stay secure in the long term, though short-term machinery constraints may be felt. Fellow expert Xavier Ferràs adds that delays in deliveries are unlikely to affect Holy Week but will eventually impact fare levels. Production pauses could lead to route shortages and possible cancellations in some cases.
Boeing resignations
Boeing faces an internal crisis that has swept away its president and CEO, Dave Calhoun. In a letter to workers, Calhoun acknowledged the world’s attention on the company and the need to put safety and quality first. The chairman of the board, Larry Kellner, will not seek re-election, and Boeing Commercial Airplanes CEO Stan Deal will also depart the company.
Ryanair issued a press release praising the leadership changes at Boeing and offering continued collaboration to speed up deliveries of Boeing 737s. Some experts, including Pere Suau of Esade, suggest the change could shift industry dynamics and potentially allow Airbus to gain greater control.
The year started with Boeing stock drops exceeding 20% after the latest 737 MAX incident with Alaska Airlines. Airbus, by contrast, has surged to record highs. Over the past six months, Airbus gained about 38.5% while Boeing fell roughly 4%. Boeing’s profits reached USD 3.329 billion last year, while Airbus posted EUR 3.789 billion in profits.
Supply chain
The underlying problem lies in the industry’s supply chain. The COVID-19 pandemic caused a halt in production in 2020, and four years on, the sector has not fully recovered. Only two-thirds of pre-pandemic deliveries are now being fulfilled, even as backlogs keep growing.
Metal shortages persist, and this situation is likely to endure. Smaller suppliers, which provide components for the larger manufacturers, struggle to obtain materials. The logistics network itself has become unbalanced, according to Pere Suau.