There May Not Be Enough Planes To Get You To Your Dream Destination. You Can Thank Boeing and Airbus. – The Average Joe
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    There May Not Be Enough Planes To Get You To Your Dream Destination. You Can Thank Boeing and Airbus.

    Noah Weidner

    February 27, 2024

    While broader inflation heads south, travel costs are heading in the opposite direction. Baggage fees and international airfares are rising across the board, and airline CEOs have a good reason — high fuel and labor expenses. Another limiting factor has been a lack of aircraft deliveries from the dominant aircraft manufacturers, Boeing (NYSE: BA) and Airbus (OTC:EADSY).

    Staying grounded: With production still well below pre-COVID levels and demand far surpassing their output, Boeing and Airbus have amassed a backlog of over 14.8K planes. Airlines are understandably frustrated by delayed deliveries and unkept promises and are seeking compensation for the inconvenience.

    • Airbus’s slow comeback: Supply chain disruptions during the pandemic caused Airbus to cut production and workers, which has impaired its ability to meet demand.
    • Boeing’s big bust: The grounding of its MAX 9 aircraft has delayed certifications and orders of other MAX models, angering partners like Ryanair (NASDAQ:RYAAY) and Alaska (NYSE:ALK).

    Demand keeps flying. Airfare? That depends.

    The International Air Transport Association expects 2024 to be a record year for travel, with over 40M scheduled flights (+2.8% from 2019) expected to carry a record 4.7B passengers (+4.4% from 2019.) However, depending on where you’re traveling this year, the number of available planes and travel demand could cost you.

    • Staying domestic? According to Hopper economist Hayley Berg, you might be in luck, as more US-based planes will make airfares 8% cheaper year-over-year (YoY) until the peak summer season.
    • Heading overseas? The Points Guy CEO Brian Kelly warns that European and Asian airfares could be “dicey,” with Kayak forecasting a potential 10% YoY increase as limited summer travel seats fill up fast.

    Loading up on fees: While airlines might charge less for tickets, they compensate in other ways. Last year, airlines generated an estimated $33.3B from baggage fees alone, 15% higher than the previous year. And to start 2024, three major US airlines have raised their bag fees to offset rising operating costs — which means traveling light could help prevent your wallet from doing the same.

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