Industry's supply chain issues slowed Air India's growth, says Boeing

Airline CEOs in India don't want to talk about any new plane development, they want to talk about timely deliveries: Boeing

Supply chain issues in the aviation industry have "considerably" slowed capacity growth, as the sector took on "too much" work than it could handle after the pandemic, said Ryan Weir, vice-president of Commercial Sales and Marketing for India and South Asia at Boeing Commercial Airplanes, on Thursday.

 

During a press briefing, he said Indian airline CEOs are less interested in discussions about any new aircraft development by Boeing and more focused on the timely delivery of planes already ordered. 

 

"The CEOs in India don't want to hear Boeing talking about the next new airplane right now. They want to talk about -- when am I getting my deliveries? And again, that goes back to our focus, which is on meeting our commitments," Weir said.

 

 

He added that Boeing expects to deliver two planes per month to Indian carriers for the next two years, with a slight increase in deliveries thereafter. 

 

In November last year, Air India CEO Campbell Wilson stated that the airline had to "recalibrate" its ambitious growth plans due to delays in aircraft deliveries and supply chain disruptions, which hindered its transformation efforts. For instance, the airline recently announced that it will begin retrofitting its existing widebody planes in June 2025, with the process continuing until 2027. Air India had initially hoped to start the retrofitting by now. 

 

The airline also hoped to receive more planes from aircraft manufacturers by now. Over the last two years, Tata Group-promoted airline has ordered a total of 570 commercial aircraft -- 220 from US-based Boeing and 350 from European planemaker Airbus.

 

Weir said: "What Air India is trying to do from a transformation perspective, versus where the industry is at in terms of supply chain constraints, we -- the industry -- has slowed down Air India considerably." He, however, stated that this issue is not just affecting Air India. 

 

"The seat development (or modernisation) issues are prevalent throughout the industry...Coming out of COVID, you had a number of airlines embarking on new seat programs and transforming the interiors of the cabins. The industry took on too much (work) from the standpoint of seat development standpoint and certification, and that is impacting Air India and others in the industry right now," he explained.

 

Boeing's delivery schedule across the world has been affected by regulatory issues and employee strikes in recent years. "We have been communicating very clearly with the customers. We do expect it (the impact of these issues) to last for some period of time. We were at (full) capacity when some of these impacts hit. It is going to take a while to recover. We are going to be as transparent as possible with our customers and it will help them move forward," Weir explained.

 

"We are going to deliver two planes per month to India during this year and next year. We are going to continue at that pace and grow slightly as we move forward," he added.

 

Indian airlines currently have about 700 planes in their fleet. India and South Asia will need 2,835 new planes by 2043, Boeing's estimates stated.

 

Weir refused to give details about the airline-wise deliveries expected during the next two years in India. "The aircraft delivery streams (the rate at which planes will be delivered to airlines) are contracted in a certain manner, and as delays hit our supply chain and production system, those ripple through at equitable rates for all airlines, and that creates the difference in terms of number of deliveries each year," he explained.

 

"We've gone very slow coming out of the strike. We are working on the safety and quality items. We realise that it's been very hard to be a Boeing customer for the last couple years, and we are dead set on making sure that we perform to the standards. I think, worse than the delays, is the unpredictability of the delivery schedules. So, the delays are going to be prevalent for a while. What we're trying to fix is that airlines can count on -- when we can give them a specific day they would receive the airplane -- and that's the singular focus at Boeing Commercial right now," he added.

 

Air India -- which also includes low-cost carrier Air India Express -- has about 300 planes in its fleet. The Tata Group-owned airline, which is currently on a five-year transformation journey, expects to have a fleet of 400 planes by 2027.