As issues with the world’s two major aircraft manufacturers persist, the open-order backlog is likely to take 13 years to address if 2023 delivery rates are to be followed, according to a report
Akasa Air is having trouble running its business due to American aircraft maker Boeing’s delayed plane deliveries. The delayed supply of Boeing 737 Maxs has made the company’s expansion plan take a back seat. The low-cost Indian airline is holding “continuous discussions with Boeing” but the talks haven’t resulted in anything fruitful so far.
“Boeing bloody... retarding our speed,” said Akasa Air’s co-founder, Aditya Ghosh, according to Reuters.
But the trouble faced by the Mumbai-based low-cost airline isn’t unique to it. Akasa Air’s struggle shines light on the broader issue impacting the Indian airlines including Air India, IndiGo and SpiceJet, as they too grapple with delayed supply of aircraft by Boeing, Airbus and Pratt & Whitney due to international supply chain disruptions.
In 2023, after a year of Air India’s homecoming, Tata Group signed an aircraft agreement with the world’s two major aircraft manufacturers, Airbus and Boeing to purchase 570 aircraft. As of December 9, 2024, only 41 aircraft were delivered, according to Air India’s website. This has turned out to be a setback for Tata Sons chairman N. Chandrasekaran, who is eyeing to transform Air India into a world-class airline.
“...You all need to help me by pushing Boeing and Airbus to deliver me the planes,” said Tata Sons chairman N. Chandrasekaran earlier at the NIT Trichy Global Alumni Meet.
India’s largest airline, IndiGo has placed an order with Airbus for 30 A350-900, the “deliveries of which are expected to start from 2027”, said the airline in a statement last year. Apart from this, the airline has grounded nearly 70 aircraft due to technical issues, apart from others, detected in 2020 with engines manufactured by American plane maker Pratt & Whitney last year. Normally, these issues would have been fixed quickly, however, due to supply chain issues post Covid-19 pandemic deliveries have been impacted, resulting in the slowing of IndiGo’s global expansion dream.
“For the time being, the key driver is to deal with the supply chain challenges,” said IndiGo’s CEO Pieter Elbers in the Q3 FY25 post-earnings call.
Similarly, as financially and legally troubled airline SpiceJet, is gradually making a comeback, it has reportedly asked the American plane maker to restart deliveries of pre-ordered Boeing aircrafts.
“We placed an order for 200 aircraft with Boeing in 2017 and received 13 aircraft...we will talk to Boeing to restart deliveries,” said the airline’s chairman and MD, Ajay Singh, in December last year, according to Business Standard.
Now these troubles have cropped up at a time when the Indian aviation market has become the third largest in the world driven by a rise in disposable income, increase in low-cost carriers and improvement in infrastructure. According to brokerage firm Groww’s report, the Indian aviation market is projected to grow at a CAGR of 11.8% from $13.89 billion in 2024 to $26.08 billion in 2030.
This is coupled with the government’s efforts to increase the number of operational airports in the country from 74 in 2014 to 157 in 2024 under its UDAN scheme, according to the ministry of civil aviation report. In fact, on November 17 last year, the domestic passenger numbers surpassed the 5-lakh mark in a day for the first time in India’s aviation sector history.
While all this has pushed the demand for more aircraft in the country, the supply side has not responded accordingly.
Boeing and Airbus, who enjoy a duopoly in the international aircraft manufacturing industry, are facing supply chain challenges driven by the US and European markets.
According to a report titled Demand & Disruption by KPMG, on the original equipment manufacturer (OEM) side, order books are stacked and sold out until the next decade but ramping up the supply chains has remained a struggle.
Besides market uncertainty, Boeing has been under intense scrutiny of the US federal aviation administration’s (FAA) due to safety concerns. After a door panel blew off a Boeing 737 Max 9 used by Alaska Airlines last year, the FAA conducted a six-week audit and found certain issues in the manufacturing process of Boeing’s 737 Max jet, according to the New York Times. With more focus on quality and safety, Boeing’s production rates are likely to suffer in the short run, the report stated.
“Any hope of having a fix coming in soon has been thrown out of the window with various new challenges like the GTF engine issues, the continued certification delays and issues with the Boeing product,” said CEO Orix Aviation, James Meyler, in the KPMG report.
On the other hand, Airbus has durability issues with its smaller A220 models.
“In commercial aircraft, Airbus is facing persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment,” the company’s website mentioned.
According to Forecast International, Boeing’s gross orders for the year 2024 were 569 aircraft and deliveries by the end of the year stood at 348, while Airbus had a total of 878 orders and delivered 766 during the same period.
As issues with the world’s two major aircraft manufacturers persist, the open-order backlog is likely to take 13 years to address if 2023 delivery rates are followed, according to a McKinsey report.