In This Article:
As Boeing (BA) grapples with persistent challenges in aircraft production, TD Cowen Senior Research Analyst Helane Becker joins Yahoo Finance Live to discuss the ripple effects on the broader airline industry.
Despite strong demand, she notes that the disruption to Boeing's manufacturing and delivery capabilities "limits growth" for airlines. Companies will be forced to limit workforce expansion, which will hamper service offerings. "Without a robust airline industry, it's very hard to have a robust economy," Becker warns.
Airlines are left with little choice but to "adapt" to Boeing's struggles, Becker explains: adjusting operations to limited aircraft supply will involve restructuring order books and reducing capacity.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Angel Smith
Video Transcript
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JULIE HYMAN: With just over 10 minutes left till the closing bell on Wall Street, we're looking at how to navigate the big picture with the Yahoo Finance playbook. Boeing's bumpy start to 2024 is hitting its customers. Several airlines looking to cut back on flights. And temper hiring plans citing uncertainty tied to fewer Boeing deliveries.
With more on the impact, we're speaking with Helane Becker, TD Cowen Senior Research Analyst. Hey, Helane. It's great to see you.
So we heard from Southwest today and we've got tough language from the United CEO talking about not wanting the further out deliveries from the Max 10 from Boeing. First of all, big picture. How much of a problem is this for the industry now that they're probably not going to get as many planes as they thought?
HELANE BECKER: Yeah, well, it's a problem because they can't grow as much as they originally thought, which I think investors, when they think about it, will appreciate. But demand is very strong.
And we still have air traffic control issues, especially in the Northeast. And we really appreciate the FAA's comments recently that they're working on a college to air traffic controller program. But pragmatically, it limit the whole idea of not being able to get the aircraft you thought you were going to get.
Means that there's going to be a cap on jobs, of course. United Southwest, and a few other airlines, I think, JetBlue is in that category have all said that they've put plans to hire and train new pilots and flight attendants on hold. So that limits growth.
And then, of course, going from smaller aircraft to larger aircraft, it doesn't help consumers, because the larger aircraft gives you a greater-- gives you greater comfort in the planes. And it also enables growth at busy airports without necessarily adding service. So all in all, it really limits the opportunity for consumers and for corporates. Because I've always said, Julie, that without a robust airline industry, it's really hard to have a robust economy.