Covid cases surge: shortage of new plane, flight rate goes high

As travel springs back and even China dismantles the last remaining Covid curbs, one stark truth is beginning to emerge the world is running desperately short of planes. Covid cases surge: shortage of new plane, flight rate goes high.

With carriers from United Airlines Holdings Inc. to Air India Ltd. placing, or looking to place, jet orders that number in the hundreds, Boeing Co. and Airbus SE are crowing variously about blockbuster deals. But supply chain constraints mean those planes won’t be delivered until possibly years down the track Jefferies LLC estimates there’s an order backlog of 12,720 aircraft currently.

All that means the sky-high airfares that people have complained bitterly about over the past few months are here to stay, and things could get worse before they get better. “People got used to lower fares during the pandemic and China’s reopening will make it worse,” Ajay Awtaney, the founder of frequent flier website LiveFromALounge.com, said.

“It’s not just a shortage of planes but also other factors like oil prices.” While one cashed-up airline in a particular jurisdiction may have the financial wherewithal to bring prices down, that would likely cause other carriers to stumble, “leading to even higher fares in the long run,” Awtaney said.

Boeing and Airbus, the planemaking giants that largely enjoy a duopoly supplying passenger jets, are sold out for their most popular single-aisle models through until at least 2029. Compounding the demand from airlines as people once again take to the skies with a vengeance and carriers look to refresh aging fleets are supply chain challenges everything from getting the necessary components to labor shortages.

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Airbus earlier this month dropped its delivery goal of 700 jetliners this year citing supply chain issues and has previously warned that a jump in energy costs will weigh particularly hard on smaller, power intensive producers, such as those making castings and forgings.