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Boeing’s Struggles Could Send Airfares Sky High

Boeing’s Struggles Could Send Airfares Sky High

Estimated reading time: 3 minutes

The turbulence of America’s biggest plane maker Boeing (BA) is more than just taking over the headlines. It could also affect your travel plans.

Between production delays, grounding for inspections, and an increasing awareness among passengers which types of planes have been encountering problems, ticket prices could rise over the summer. In January, ticket prices already  increased 3% year-over-year, according to data from the Airlines Reporting Corporation.

Lagging Supply

Travel has rebounded from its pandemic-era lows, but airlines are left waiting for new planes.

Airlines like Southwest (LUV) and Ireland’s Ryanair each expect to receive around 40% fewer Boeing aircraft this year than originally anticipated. As of December, there was a global backlog of roughly 15,000 planes globally, according to ADS Group, a trade association for aerospace and defense organizations.

And while Boeing’s troubles are all over the headlines, it’s not the only company with issues.  Airbus, Boeing’s European rival, is still making fewer planes than they did before the pandemic, and it has hundreds of jets grounded due to engine issues.

Boeing and Airbus effectively have a duopoly on the aircraft manufacturing industry, meaning most airlines have no other source to replenish their commercial-grade aircraft supply. Even if they could, jets are ordered years in advance, so there’s no such thing as an immediate fix.

Read more reporting here.

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