Tariffs and New Aircraft Delays threaten Airline Growth  

New aircraft delays, supply chain bottlenecks, higher tariff costs and cautious consumer spending are all conspiring to hamper airline growth, airlines were warned, at the annual IATA conference, held in New Delhi. 

Airline bosses have, Reuters reports, complained of ‘unacceptable’ aircraft delays, that they feel are preventing them from taking advantage of record passengers' levels, showing a healthy post-pandemic recovery. 

“Delays are becoming inexcusable. Transparency, to be frank, is lacking, and we’re getting agitated”, said Steven Greenway, CEO of flyadeal, a Saudi Arabian Budget airline, speaking to Reuters. 

Aircraft manufacturers have been struggling to deliver new aircraft, with Airbus warning airlines that they face up to three years of delivery delays, and Boeing is trying to increase production following labour strikes and quality issues. 

Therefore, it is no surprise, as Reuters reports, that some airlines are considering legal options over the delays, but for now, are opting to work with manufacturers.  

In addition to the delays in new aircraft, there are fears that the introduction of tariffs may have an adverse effect on the global economy. 

Firstly, many passengers are fearful of an economic slowdown, resulting in many passengers, particularly in the US, delaying or cutting back on their travel plans. 

Secondly, airlines are worried that manufacturers may pass the cost of tariffs into the price of new aircraft, when delivered. This comes as GE Aerospace and several other delivery groups have said that they will incur higher costs in the form of a surcharge, Reuters reports. 

IATA revised their previous airline’s profit forecast to $36 billion for the year, down from December’s forecast of $36.6 billion. 

Yet, the conference was not all doom and gloom. The host nation’s largest carrier, IndiGo, placed an order for new Airbus jets and Air India is eyeing up another huge order, similar to the record 470- plane deal from Boeing and Airbus, in 2023. 

“Indian carriers have placed orders for more than 2,000 new jets and that’s just the start”, said India’s Prime Minister, Narendra Modi, addressing the conference.  

In his remarks, Mr Modi highlighted that the number of Indian air passengers is expected to reach 500 million by 2030, up from the current figure of 240.