Lufthansa suffers delivery delays from Boeing and Airbus

German airline Lufthansa suffers from delays in aircraft deliveries from Boeing and Airbus. According to CEO Carsten Spohr, the problems will not be solved before 2030, and the shortfall could cost Lufthansa around half a billion euros a year.

The airline, which wants to modernize its fleet, has ordered 250 new aircraft from Airbus and Boeing. Deliveries are scheduled between 2024 and 2029, but currently, there is a delivery backlog.

Shortage of spare parts

Last week, Airbus lowered delivery expectations for this year from 800 aircraft to around 770. The announcement comes amid growing skepticism among suppliers about aircraft production as Airbus, Europe’s biggest aerospace group and the world’s largest aircraft manufacturer, faces shortages of spare parts.

The shortfall is mainly in supplying engines for the narrow-body aircraft of its A320 family, one of its best-selling models. There is also a shortage of cabin and seat parts and landing equipment.

At the same time, a series of incidents at Boeing have intensified scrutiny of the US manufacturer, increasing delivery delays during the pandemic. Last winter, Ryanair was also forced to cancel flights due to these delays.

Airbus and Boeing’s order books are almost full until the end of the decade, so the airline companies have no choice but to tussle, especially since switching manufacturers is highly complicated and expensive.

Boeing buys subcontractor Spirit Aerosystems

Airbus shares many suppliers with Boeing, and so do their start-up problems. The Americans could hypothetically trap subcontractors. However, suppliers will no doubt also have to face the facts and pay fines for the delay in delivery, although that could also lead to legal wrangling.

Today, it was also announced that Boeing is taking over its most important subcontractor, Spirit Aerosystems, a company that Boeing founded in 2005. The deal values the supplier at $4.7 billion. The accident in which part of a Boeing 737 Max-9 fell in mid-flight early this year exposed quality and manufacturing defects at both Boeing and Spirit, prompting both companies to reassess their partnership.

Boeing’s rival Airbus may also acquire some parts of Spirit. If it does, it would be paid 559 million dollars to acquire those assets. This includes departments that make parts of the A350 fuselage in Kinston (North Carolina, US) and Saint-Nazaire (France).

Bad first quarter

To top it off, about 100 of the 750 Lufthansa aircraft are also grounded for maintenance or because they had been taken out of service last week. Moreover, Lufthansa reported a net loss of 734 million euros in the first quarter at the end of April. That loss came amid pressure from strikes in the spring that crippled operations. Meanwhile, Lufthansa Airlines has announced savings to curb the red figures, particularly in recruitment.

The group also expects operating profit for the second quarter to be 100 million euros lower than the previous year. The delivery delays will push seat capacity in the second quarter to around 92% of pre-crisis levels, down from the 94% initially planned.

Lufthansa expects an adjusted annual operating profit of about 2.2 billion euros for the entire year, compared with 2.68 billion euros in 2023.