THE Seattle factory strike crippling production at Boeing is triggering delays to 737 Max deliveries across Asia, a region that’s already home to some of the biggest order backlogs for the flagship aircraft.
The US manufacturer is due to hand over 981 Max jets to carriers in Asia, led by Air India and Indonesia’s Lion Air, by 2030, according to data from Cirium. That’s close to one-third of all scheduled deliveries of the aircraft worldwide over that period.
But with Boeing at loggerheads with the International Association of Machinists and Aerospace Workers, which represents some 33,000 Boeing employees who have been striking for almost two weeks, concerns are escalating about the reliability of the plane pipeline.
Responding to queries from Bloomberg News, Korean Air Lines, Vietjet Aviation and Japan Airlines said they were either suffering delivery delays due to the strike, expecting planes to arrive late or concerned about handover dates slipping. Others including Singapore Airlines said they were working with Boeing on delivery schedules in light of the factory shutdown.
Aviation’s supply chain is still fractured from the pandemic, and Asian carriers are struggling to get enough aircraft to meet demand as it is. The union’s strike only makes things worse. At stake is capacity in a region that’s the growth engine for air travel worldwide. And when there are not enough seats for everyone who wants to fly, fares typically go up.
The dispute – combined with supply-chain ruptures and economic woes – means plane deliveries worldwide will stall in 2024, according to aviation advisory firm IBA. They will not reach their 2018 pre-pandemic high until 2026, IBA said this week.
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Boeing did not respond to a request for comment on any delays to Max deliveries in Asia.
Resolving the strike swiftly is critical for Boeing to avoid further damage to its strained finances. The manufacturer has said its goal of building 38 737 Max jets a month by year-end will take longer due to the staff walkout. The company this week angered the union by taking its 30 per cent wage hike proposal directly to workers, bypassing negotiators. The union has said members want more.
Air India and Lion Air, the two airlines in Asia with the largest number of 737 Max jets due this decade, did not respond to requests for comment.
Ryanair Holdings chief executive officer Michael O’Leary said last week that as many as 10 jet deliveries expected in the first six months of next year could slip into the second half. BLOOMBERG
