It has been a good week and a bad week for Boeing, once the world’s mightiest aerospace company, but in recent years relegated to fourth place in FlightGlobal’s Top 100 revenue rankings behind Lockheed Martin, Raytheon Systems and Airbus. The upside was an order for 52 737 Max jets from Alaska Airlines, with purchase rights on a further 105, the biggest commitment for new aircraft in the carrier’s history.
It means the West Coast-based operator has completed a switch of allegiance from Airbus, 35 of whose A320-family types it inherited when it bought rival Virgin America in 2016. Alaska will divest these before the end of next year. In other positive developments for Boeing, shareholders at IAG – the parent group of British Airways and Iberia – confirmed an earlier agreement from May for 50 737 Max aircraft. Meanwhile, Brazil’s Gol is to add 12 more 737 Max 10s to its fleet from 2027.
However, for Boeing the last three years have brought more clouds than silver linings, and so it was this week. The manufacturer announced a $3.3 billion third-quarter loss, with this time deficits on fixed price contracts in its defence business – rather than commercial – largely to blame. Boeing has also cut its China market forecast, amid uncertainty over the country’s ongoing travel-hammering, zero-Covid policies and whether the 737 Max will ever be re-certificated there.
Finally, supply chain snags are hitting Boeing, like everyone else. The latest part in short supply: 787 cockpit windows. Lufthansa Group chief executive Carsten Spohr complained that it was near impossible to source the item for repairs because of staff shortages and logistical bottlenecks. Olivier Andres, his counterpart at Safran – one-half of the CFM International whose Leap powers the Max – warned production of that engine would lag this year due to supply disruption.
One part of the industry that seems to be continuing to prosper is airfreight. Cargo aircraft became highly sought after during the pandemic as airlines withdrew passenger aircraft from service. This reduced belly hold capacity at a time when goods still had to flow around the world, despite lockdowns and restrictions on people travelling. There was a concern that, with airliners back in the skies, the cargo demand bubble of 2020 and 2021 would burst.
However, that assumption fails to take into account the accelerating transition from bricks and mortar retailing to e-commerce – something made clear by the boarded-up storefronts on most town main streets or shopping malls. Aircraft are still the only fast and reliable way to get the latest consumer must-haves – from fashion to smartphones – from factory to end-user. No one who orders something on the internet wants a purchase to arrive two months later.
Commercial carriers are beginning seriously to tap the opportunity, including Hawaiian Airlines, which has committed to operate at least 10 Airbus A330-300 Freighters for Amazon. While companies such as Amazon have dabbled with their own air transport operations, running an airline – with the plethora of regulations and training involved – is harder than operating trucks. Partnerships of this sort between e-commerce specialists and airlines may become more common.
welcome aboard the new airside
We took our community to the next level with an elevated look, innovative features, and new tools.