A shortage of over 4,500 commercial aircraft now exists in the market, according to a 2025 outlook report from PwC.
“In 2024 alone, missed delivery commitments were an estimated 560 aircraft,” the report said. “These aircraft will never be built and delivered, leaving airlines short of capacity for many years to come. The number of firm orders booked also fell sharply in 2024 from 2023's record-breaking total.”
This was perhaps evident with 2024's Farnborough International Airshow being markedly quiet in terms of aircraft orders. Firm orders this year are expected to remain on par with last year's levels.
However, Boeing vice president commercial marketing Darren Hulst speaking, at Airline Economics’ Growth Frontiers Dublin 2025, said the analysis was “misconstrued”.
“In reality, if there wasn’t a pandemic, the industry was set to produce 4,000 more airplanes than it has over the course of the last eight years,” he explained. “But did it need 4,000 more aircraft? Frankly, no it did not… I think we’re short somewhere in the neighbourhood of 1,500 and 1,800 aircraft. That 4,000 really translates to about half of that in terms of actual shortage.”
Hulst said the supply and demand deficit is expected to balance out at the end of the decade, with the “key elements in place” for 2025 to ensure the stability of the supply chain and a workforce ready to increase the output.
Boeing's 737 MAX production is currently capped at 38 per month, placed on by Federal Aviation Administration (FAA) after the Flight 1282 incident.
PwC said the FAA will need to be “sufficiently funded and resourced" to provide the necessary oversight and approvals to support aircraft production and delivery. FAA administrator Mike Whitaker will leave his role on January 20, 2025. The report said a replace is required “immediately” to ensure these processes carry on without delay.
Aircraft deliveries are expected to increase “significantly” this year with the largest rebound coming from Boeing, PwC said.
“The aircraft leasing sector has been a net beneficiary of the capacity issues and improving underlying demand in aviation,” said PwC's Ireland's aviation finance leader Brian Leonard. “However, the shortfall and backlog of aircraft deliveries may also limit lessor's growth strategies over the medium and longer term and other avenues for expansion may need to be considered.”
Leonard also urged lessors to “step up their efforts” to help the industry achieve net zero emissions by 2050 targets.