This article first appeared on GuruFocus.
Boeing (NYSE:BA) and Airbus SE (EADSY) are facing one of the toughest periods in their modern history as aircraft certification and delivery delays pile up, choking airline growth across Europe. Air France-KLM CEO Ben Smith called the situation unprecedented, noting that some long-haul models have been waiting for certification for as long as seven or eight years. Despite global supply chains recovering from the pandemic, Smith declared progress remains elusive, with every supplier still running behind schedule. The setbacks are straining airlines ability to expand fleets and roll out more fuel-efficient jets a key part of their decarbonization plans.
At the center of the problem sits Boeings 777X program, now six years late and not expected to enter service until early 2027, a delay that has frustrated major customers including Deutsche Lufthansa AG and British Airways parent IAG SA. The timing has been built worse by the ongoing US government shutdown, which has frozen aircraft inspections and delayed approvals for even minor cabin components, Lufthansa CEO Carsten Spohr declared. The ripple effects are now spilling over into transatlantic partnerships, with Lufthansas US connections also feeling the pinch.
Still, some glimmers of improvement remain visible in the short-haul market. Ryanair Holdings Plc CEO Michael OLeary declared Boeing has built significant progress ramping up output of its 737 Max jets, though deliveries are still running late. For now, Europes airlines are balancing record travel demand with constrained aircraft supply a mismatch that could keep capacity tight and ticket prices firm well into the next delivery cycle.
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