((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto)) by Tim Hepher and Padraic Halpin
Global airline financiers are meeting for the first time since a mid-flight cabin explosion plunged Boeing BA.N into a new safety crisis, as signs of wider disruption emerge in the $150 billion jet industry.
Lessors, bankers and airlines meeting in Dublin – where the global airline finance sector is booming – will examine the supply implications of the recent partial grounding of the Boeing 737 MAX 9, following the incident occurred at Alaska Airlines at the beginning of January.
For months, aviation has struggled to keep pace with the post-pandemic travel boom due to shortages of labor and parts.
But widespread outrage over the near-disaster that led to an emergency landing with a breach in the plane’s side, but no serious injuries, added a new layer of regulatory risk.
“Demand is more or less assured; the question is when supply will catch up Rob Morris, head of global consulting at Ascend by Cirium, told Reuters ahead of the week-long airline economics conference flights which begins Monday.
“We have estimated 2026 or 2027, but there must be a downside risk now because of the MAX
Last week, the Federal Aviation Administration took the unusual step of ordering Boeing to stop increasing production of the 737 MAX until questions about its quality controls were resolved.
She gave no indication of the duration of this limitation. But when it is lifted, industry experts say regulators are expected to add controls that could dampen the industry’s growth forecasts.
While a previous safety crisis linked to fatal MAX crashes in 2018 and 2019 prompted regulators to step up scrutiny of plane design and development, the blowout and subsequent discoveries of loose bolts in other parts of the fleet could weigh on production.
Analysts say this means the two crises will make planes harder to develop and slower to produce, respectively.
This is potentially good news for leasing companies which have already placed large aircraft orders and will now secure a better return on investment as airlines rush for capacity.
But for airlines, it could mean a delay in receiving new technologies needed to reduce costs and emissions, as well as higher rental rates. This in turn could lead to higher prices.
After Boeing faced a barrage of criticism from regulators and politicians, the Dublin event will be a new test of confidence for owners representing more than half of the world’s airliner fleet.
Several industry commentators, including influential analyst Richard Aboulafia, have called for Boeing Chief Executive Dave Calhoun, or other executives and board members, to step down.
Boeing declined to comment directly on these reports.
Aviation is a close-knit industry with few alternative suppliers and a long memory, so explicit attacks on sitting executives are rare, at least in public.
But investors will be paying close attention to the tone of speeches by executives of major leasing companies such as AerCap AER.N , SMBC Aviation Capital, Air Lease AL.N and Avolon during Monday’s opening sessions, several delegates told Reuters.
Calhoun pledged that Boeing would own up to its mistakes and ensure that an accident like Alaska Airlines “can never happen again.”