Boeing’s latest 737 Max crisis has worsened an airline shortage of popular narrowbody aircraft, sending the cost of used-jet rentals to the highest level in years.
The US planemaker has slowed production of its bestselling model to address quality lapses tied to a near-disaster on a 737 Max 9 in January. With Airbus also struggling to lift output, available planes remain scarce. As a result, airlines are searching out leased ones – especially the largest single-aisle jets that carry more passengers.
A three-year-old 737 Max 9, the largest narrow body in production at Boeing, now commands a higher monthly rent than before the pandemic, according to data from Ishka Global, which tracks aircraft prices. The price of an earlier 737-900ER is approaching January 2020 levels. A similar trend has boosted fees for the Airbus A321neo and the prior A321-200 variant.
According to the Ishka figures, the monthly rate for the Max 9 model stood at US$315,000 (S$424,289) in March, compared with US$305,000 at the start of 2020. The Airbus A321-200 costs US$335,000 to lease per month, bringing it back to the level of January 2020.
Lessors have gained leverage and are now more likely to shift planes from struggling airlines to ones that are willing to pay a premium, said Ishka Global head of advisory Eddy Pieniazek.
Carriers “are competing with a decreasing pool of available assets”, he said.
Rental prices for used aircraft had already surged in 2023, following a shortage that developed when air travel quickly rebounded from the pandemic. While airlines ordered jets in record numbers, Airbus and Boeing have taken longer to rebuild output.
While Airbus deliveries are increasing, supplier constraints have slowed its progress towards surpassing pre-Covid production. Airlines are also grappling with engine issues that have grounded hundreds of A320-series planes – further squeezing availability.
Disruptions at Boeing date back to the global grounding of the 737 Max in 2019, following two fatal crashes. Its bid to ramp up deliveries was hobbled by a string of production glitches before the Jan 5 blowout of a fuselage panel on an Alaska Air Group flight.
Regulatory scrutiny since then has pushed back certification of what will become the largest 737, the Max 10. The uncertain timing of its debut has forced United Airlines and others to cut back on growth plans, seek out alternative models, or both.
US regulators have also capped Boeing 737 deliveries at 38 monthly units to ensure the company puts enough focus on improving its safety and manufacturing processes. BLOOMBERG
https://www.straitstimes.com/business/airlines-desperate-for-planes-are-paying-more-for-older-models
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