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Prices Of Airline Tickets Stay High As Upkeep Woes Crimp Fleets

By Dave Simpson

Labour shortages and supply chain snarls are making it harder for airlines and lessors to return airplanes grounded during the pandemic to the skies as quickly as they would like, operators and maintenance providers say.

A global squeeze on maintenance, repair and overhaul (MRO) capacity is one of the factors contributing to higher airfares for travellers, as demand has rebounded faster than aircraft can be made available and costs are rising.

"Some suppliers are coming out with double-digit escalations and surcharges," said Mahesh Kumar, chief executive of Asia Digital Engineering, the maintenance arm of Malaysian budget carrier AirAsia.

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"The airlines keep increasing their fares but that is not a sustainable business," he added at the MRO Asia-Pacific conference in Singapore.

Complications of that kind mean that just about 110 of AirAsia's fleet of 200 planes have returned to service, he added.

Yet getting the rest back in the air is challenging because of the scarcity of MRO slots that also drives up their prices.

The bottlenecks at MROs have been compounded because airlines returned planes to lessors at a much higher rate than usual during the pandemic, which crushed travel demand.

PAINTED INTO A CORNER

Aircraft switching to a new airline need maintenance checks, cabin interior changes and livery repainting at MROs that are often short-staffed after pandemic lay-offs of workers while facing delays at parts suppliers struggling with similar woes.

"We've had real issues with the number of paint shops that can take aircraft and in addition to that, the inability of some of the paint shops to get some of the specialist paint," said Robert Martin, chief executive of aircraft lessor BOC Aviation Ltd 2588.HK

"If you've got some logo on the back of the aircraft with multiple colours, if you are missing one colour, that's a bit of a problem."

Now it takes about three months to make the changes required to shift a narrowbody plane from one customer to another, up from one before the pandemic, Martin added.

Hangar capacity and workers were not sufficient to meet customer demand, said Jeffrey Lam, commercial aerospace president of Singapore Technologies (ST) Engineering Ltd STEG.SI.

"The ST Engineering network, we are full and so customers are always asking for more slots," he said.

"We have operations in the United States, Europe, China and Singapore. Apart from China, all of our operations are facing labour challenges."

The strong demand is driving up labour costs as MROs compete for staff and available workers are being asked to do more overtime, Lam said.

"We don't want to too much overtime, because you have concerns around safety and quality," he said.

"We wish we could add more labour and take on more work. So we are worried about schedules, redelivery schedules, costs and all that."

Lessor BBAM has not had much success getting MRO slots this winter, leaving out in the cold some airline customers who sought planes quickly to meet demand in next year's summer peak, said Patrick Low, its vice president for technical matters.

"The speed of recovery is really determined about whether we can get MRO slots," he said. "I think the earliest an MRO is telling us is, come back June next year, possibly we have slots for you."

Airline Body IATA Warns Strength Of Recovery Would Be Weakened If China Stays Shut Next Year

The above news followed news that the strength of the overall recovery in global airline passenger demand will be impacted if China continues to enforce tight border restrictions next year, the head of airline body IATA said on Wednesday 20 September.

International Air Transport Association director general Willie Walsh told a conference in Doha that China's zero-COVID policy had "devastated" Hong Kong, and caused it to lose its position as a global aviation hub.

Hong Kong, traditionally a major hub where passengers transit between international flights and on journeys to China, is the base of airline Cathay Pacific.

BRIEF-IAG's CEO Gallego Says The Only M&A Option We Are Working On Is Air Europa

All of the above news followed the following brief -

Chief Executive Officer of International Consolidated Airlines Group SA ICAG.L, Luis Gallego:

  • ASKED IF IAG IS INTERESTED IN PORTUGUESE AIRLINE TAP, SAID THE ONLY M&A OPTION THE GROUP IS WORKING ON IS AIR EUROPA

Airline Body IATA Says Hong Kong Has Lost Global Aviation Hub Status

All of the above news followed news that International Air Transport Association director General Willie Walsh said on Wednesday 21 September that Hong Kong has lost its position as a global aviation hub due to China's zero-COVID policy.

Walsh was speaking at a conference in Doha organised by the International Air Transport Association (IATA).

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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