New Boeing boss holds first meeting with FAA chief as Iata urges supply chain fix

Iata head issues plea to plane makers and suppliers as air travel demand soars

Willie Walsh, director general of Iata, said there is an urgent call for manufacturers and suppliers to resolve their supply chain issues. Photo: Iata

Boeing's new chief executive Kelly Ortberg met with Federal Aviation Administration (FAA) chief Mike Whitaker earlier this week as the US plane maker faces increased regulatory scrutiny.

Mr Ortberg also met with other US stakeholders, Boeing said in a statement to The National, without providing additional details.

“This week I spent time in Arlington, Virginia, meeting with employees, board members, our Pentagon customers, and our regulators. All of these discussions have centred around restoring trust and meeting our commitments,” said a memo from Mr Ortberg to all Boeing employees.

“With the FAA, we discussed our safety and quality plan, and I shared our focus on true culture change, empowering employees to speak up when they see potential issues and bringing the right resources together to solve them. Our Pentagon customer noted the importance of Boeing delivering on its programme engineering commitments – a critical expectation we need to improve on for our customer and the warfighter.”

Mr Whitaker in January prohibited Boeing from increasing production of its best-selling 737 Max narrow-body after a door panel blew out mid-air during a January 5 flight on an Alaska Airlines jet.

Mr Ortberg stepped into his position on August 8 and has pledged to “restore trust” in the embattled US aerospace company.

Earlier this week, the head of the International Air Transport Association (Iata) urged aerospace manufacturers and suppliers to find solutions to continuing supply chain disruptions as airlines struggle to get new planes to meet strong travel demand.

In July, passenger demand reached a record high for the industry and in all world regions except Africa, despite the significant disruption caused by the CrowdStrike IT outage, Willie Walsh, Iata's director general, said in a statement on August 29.

“As much of the world returns from vacation, there is an urgent call for manufacturers and suppliers to resolve their supply chain issues so that air travel remains accessible and affordable to all those who rely on it,” Mr Walsh said.

“People need and want to fly. And they are doing that in great numbers. Load factors are at the practicable maximum. But persistent supply chain bottlenecks have made deploying the capacity to meet the need to travel more challenging.”

The chief of Iata, which represents about 330 airlines accounting for more than 80 per cent of global air traffic, is the latest industry executive to express frustration over the years-long supply chain problems.

Several airlines have warned about the impact of aircraft delivery delays on their operations. Both Airbus and Boeing are struggling with shortages of parts. Boeing also faces additional regulatory scrutiny following the near-disaster of the Alaska Airlines incident early this year.

Earlier this month, Boeing said it is halting 777X flight tests after an inspection revealed the failure of a structure that mounts the General Electric engines to the massive aircraft's wings, in the latest setback to the long-delayed programme that is still awaiting certification.

Total travel demand, measured as revenue passenger kilometres (RPK), rose 8 per cent in July, compared with the same month in 2023, according to Iata's latest available data.

Demand outpaced the 7.4 per cent year-on-year growth in capacity, measured in available seat kilometres (ASK), in July.

Load factor, a measure of how well an airline fills available seats, recorded a peak of 86 per cent, reflecting strong demand, while cyber security company CrowdStrike's IT outage had “no noticeable impact” on the industry, Iata said.

The company apologised for the massive global IT failure in July that grounded planes, knocked out TV broadcasts and affected banks, hospitals and financial markets. Flights were delayed around the globe, with carriers such as Turkish Airlines, Air France, KLM, Delta and Ryanair and hubs in Berlin, London and Amsterdam among those affected at the peak of summer travel season.

Nevertheless, demand for international travel in July rose 10.1 per cent compared to the same month last year. Capacity was up 10.5 per cent year-on-year and the load factor fell to 85.9 per cent, Iata said.

“All regions showed strong growth for international passenger markets in July 2024 compared to July 2023, with signs that many markets are returning to long-term growth trends after the post-pandemic bounceback,” Iata said.

Airlines in the Middle East recorded a 5.8 per cent year-on-year increase in demand. This was in line with a capacity increase of 5.5 per cent year-on-year, while the load factor stood at 84.1 per cent.

Meanwhile, demand within the large domestic markets was strong, reaching all-time highs in all key markets, except India. Brazil again expanded the fastest, while Japan and Australia rebounded from the previous month’s declines.

Overall, total domestic traffic saw a 4.8 per cent rise compared to July 2023. Capacity was up 2.8 per cent year-on-year and the load factor was 86.1 per cent.

Air cargo surges

Air cargo demand hit record highs year-to-date in July with strong growth across all regions, according to Iata.

Total demand, measured in cargo tonne-kilometres (CTKs), rose by 13.6 per cent compared to July 2023 levels.

This marks the eighth consecutive month of double-digit year-on-year growth, with overall levels reaching heights not seen since the record peaks of 2021 during the Covid-19 pandemic.

Capacity, measured in available cargo tonne-kilometres, increased by 8.3 per cent compared to July 2023 mainly due to a rise in the belly capacity (cargo space) of passenger planes.

“The air cargo business continues to benefit from growth in global trade, booming e-commerce and capacity constraints on maritime shipping,” Mr Walsh said.

“With the peak season still to come, it is shaping to be a very strong year for air cargo. And airlines have proven adept at navigating political and economic uncertainties to flexibly meet emerging demand trends.”

Airlines in the Middle East recorded a 14.7 per cent year-on-year demand growth for air cargo in July. The Middle East–Europe trade lane performed particularly well, surging 32.2 per cent, ahead of Middle East-Asia which grew by 15.9 per cent year-on-year.