Despite a Record Year, Airlines Are Grappling With Big Challenges (economist.com)
- Reference: 0180487577
- News link: https://tech.slashdot.org/story/25/12/30/1748203/despite-a-record-year-airlines-are-grappling-with-big-challenges
- Source link: https://www.economist.com/business/2025/12/30/despite-a-record-year-airlines-are-grappling-with-big-challenges
> Not everything has been in the ascent. European and North American airlines, which account for three-fifths of the industry's net profits, have had to contend with circuitous long-haul routes to avoid Russian airspace since the start of the war in Ukraine. This year parts of the Middle East became no-go zones after Israel's strike on Iran in June. America's airlines were hit by a government shutdown that stopped federal workers from travelling and kept unpaid air-traffic controllers at home, disrupting flights.
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> What is more, despite a drop in fuel prices, which account for 25-30% of airlines' operating expenses, other costs have risen.
Airlines flew 4.8 billion passengers in 2024, beating the 2019 peak, and that figure likely reached 5 billion in 2025 as combined revenues topped $1 trillion for the first time and load factors hit a record of nearly 84%.
But the industry is flying older planes because Boeing and Airbus can't deliver enough new ones. The duopoly shipped under 1,400 aircraft in 2025, well below the 2018 record of just over 1,600. Boeing has struggled since two fatal 737 MAX crashes in late 2018 and early 2019 led to a 20-month grounding, and a fuselage panel blew off another 737 MAX mid-flight in early 2024. Airbus cut its 2025 delivery target from 820 to 790 in early December due to a supplier's production flaw, and Pratt & Whitney engine problems have grounded a third of the global A320neo fleet.
IATA estimates the aircraft shortage won't resolve before 2031 at the earliest, and the global fleet's average age has climbed to 15 years from 13 in 2019. Annual fuel efficiency gains have slowed from about 2% to 0.3% in 2025, and an IATA and Oliver Wyman report pegs the cost of aging fleets -- extra fuel, repairs, spare parts -- at over $11 billion in 2025.
[1] https://www.economist.com/business/2025/12/30/despite-a-record-year-airlines-are-grappling-with-big-challenges
Lockheed should buy Boeing (Score:2)
Lockheed should buy Boeing, and then rip and replace whatever management style Douglas brougt in, with Kelly Johnson's 14 Rules.
Because, goddamn it, Boeing isn't Boeing since the merger. What survived was the worst of both.
[1]https://www.scribd.com/documen... [scribd.com]
[1] https://www.scribd.com/document/621202233/Kelly-Johnsons-14-Rules-and-Practices
Re: (Score:2)
I am not sure why they would want to. Boeing has been dysfunctional on both the commercial and military sides for years now. Repairing the rot would probably be more work that the results would justify.
Re: (Score:3)
I imagine Lockheed is pretty pleased with shuttering it's commercial aircraft division.
Whatever the justification for a Federal stake in Intel I would think it would then go triply so for Boeing because I agree, something is rotted at the culture there.
That said though I think once you acknowledge the corporate rot at Boeing you'd be forced to reckon with it in so many other American corporations.
Re: (Score:2)
Constellation was too much, too late, just like DC-7. The jets had arrived. They still sold many Constellations, and they served well.. except for that nasty habit of coming in with one out of four engines feathered. But, that's really on Pratt, not Lockheed.
L1011 got caught in the Rolls-Royce implosion, caused by delays of the RB211, the engine for the L1011 (and others.)
i imagine Lockheed should by now be "over it," and see an opportunity to slide in and deliver something remarkable again.
There is a r
Re: (Score:2)
Mergers and Acquisitions should not be a thing. It's why the economy is the way it is, and more merging won't make it better.
Re: (Score:2)
> Mergers and Acquisitions should not be a thing. It's why the economy is the way it is, and more merging won't make it better.
Normally I'd agree with you. M&A usually leaves both weakened, or one dead and one strong.
But, this is already an industry rife with M&A. That's how we got McDonnel-Douglas, who bought Boeing with Boeing's own money. That's how we got Lockheed-Martin, and I have no idea WTF Grumman is at these days, or North American, or.. Chance-Vought, or.. or ... you get the idea.
It pains me to see Boeing floundering like this. That was Douglas' job, not Boeing's. I'd rather Lockheed buy it and sort it out th
Rising profits, falling doors. (Score:2)
> But the industry is flying older planes because Boeing and Airbus can't deliver enough new ones.
I'm sure with the liberal application of glue, Boeing can keep the doors on.
profits vs. revenues (Score:2)
Is it just me or does it seem like the article consistently used the word "profit" when they mean "revenue"? They're confusing the whole subject by talking about how record profits are ruined by expenses, but profit is what you get after you take expenses out of revenue. Bad AI article, or an author who doesn't really understand how P&L works?
Re:profits vs. revenues (Score:4, Informative)
> Is it just me or does it seem like the article consistently used the word "profit" when they mean "revenue"? They're confusing the whole subject by talking about how record profits are ruined by expenses, but profit is what you get after you take expenses out of revenue. Bad AI article, or an author who doesn't really understand how P&L works?
What makes you think they're using the wrong term? All of the numbers look reasonable for the labels given. $1T in global revenues, $40B in global profits. That's a crazy low profit number, for that revenue number; it means airlines are basically just breaking even. They flew 5B+ passengers, so that's a profit of $7.90 per passenger.
So what makes you think they're saying "profit" when they mean "revenue?
Re: (Score:2)
> So what makes you think they're saying "profit" when they mean "revenue?
Say that shit again after you rattle off every single executive bonus paid in the last 12 months.
When they say "costs" they mean obscene lifestyles.
My deepest sympathies (Score:1)
As much as I try to imagine the pain these airlines are experiencing I, and most likely them, will find solace in celebrating the record profits this year.
Re:My deepest sympathies (Score:4, Insightful)
Yup, this is the rinse/repeat playbook of the Airlines for the past 40 years.
"Oh, we are so poor, we cant afford anything. This will justify our raising prices again, putting money locks on bathrooms, and charging you for each peanut in the bag while we ignore our safety and maintenance needs on the planes"
Re: (Score:2)
> Yup, this is the rinse/repeat playbook of the Airlines for the past 40 years. "Oh, we are so poor, we cant afford anything. This will justify our raising prices again, putting money locks on bathrooms, and charging you for each peanut in the bag while we ignore our safety and maintenance needs on the planes"
It's attitudes like this that make consumers want a small Recession. Just to bitch slap corporate greed right across the fucking face. As many times as it takes.