Airlines around the world are grappling with a shortage of planes heading into what is expected to be a record travel season this summer.
Travel demand in the U.S., Europe and Asia is now well above pre-pandemic levels while aircraft deliveries have fallen sharply due to ongoing production problems at the world’s only two commercial aircraft manufacturers, Boeing (BA) and Airbus (AIR).
Air carriers are spending billions on repairs to keep older, less fuel-efficient planes flying, and paying premiums to secure aircraft from lessors.
However, the lack of new aircraft rolling off assembly lines has forced some airlines to cutback their schedules.
At the same time, the number of travelers this year is forecast to hit record levels, with 4.7 billion people expected to travel in 2024 compared with 4.5 billion in 2019 before the pandemic, according to the International Air Transport Association (IATA).
Airlines large and small have been told that they will receive about 20% fewer aircraft this year because of production issues at Boeing and Airbus.
U.S. carriers are being particularly hit hard, receiving 32% fewer aircraft than planned a year ago because most depend on Boeing’s troubled 737 MAX airplanes.
At the same time, Airbus has encountered problems with its Pratt & Whitney engines.
Due to the shortage of new planes, the aircraft leasing market is booming. Data from Cirium Ascend Consultancy shows that lease rates for new Airbus and Boeing aircraft have hit $400,000 U.S. per month, the highest level since 2008.
