Manhattan resident Alyssa Winderlich, 27, an event marketing professional, flies frequently for work. She has been a loyal patron of Southwest Airlines – but due to increasing prices and fewer flight options, she’s had to start booking almost all of her upcoming travel on Spirit Airlines.
“I never really knew anything about the plane models, I just have my preferred airlines that I feel safe flying,” she says.
Southwest has notably been facing several issues, from pilot unions to leadership woes – and recently, Boeing’s delivery delays. The airline recently announced that it won’t be receiving any of its anticipated 737 Max 7 aircraft this year.
As a result, they are scaling back their hiring efforts, including a 50% reduction in pilot recruitment and a 60% decrease in flight attendant hiring compared to earlier projections.
The fallout reaches beyond Southwest. Economists and experts warn of a ripple effect across the supply chain sector and manufacturing.
“Until they integrate the people and processes with the technologies that they are trying to bring into manufacturing, you’re going to continue to have these quality control issues,” said David Gillen, director of the Center of Transportation Studies at the University of British Columbia.
Yet, while the airline economy faces challenges, Boeing’s manufacturing hub cities, including North Charleston, South Carolina, are experiencing robust growth. In an upcoming report from the Federal Reserve Bank in Richmond, Economist Adam Scavette finds that Boeing’s 787 Dreamliner assembly plant has directly created 3,400 new jobs in transportation equipment manufacturing and catalyzed 9,600 jobs across other industries in the Charleston metro area within its initial five years of operation.
However, the manufacturing sector continues to grapple with challenges, including a projected skills gap expected to result in 2.1 million unfilled jobs by 2030, according to a recent study by Deloitte and The Manufacturing Institute.
“Manufacturing at large is going to stay on a constrained trajectory in 2024 due to high-interest rates and restrictive lending conditions as demands for all goods and services are softer,” Said Oren Klachkin, a market economist at Nationwide in Boulder, CO.
The workforce is projected to grow 7.66% in the next 10 years, but the aerospace product and parts manufacturing industry has a lower projected workforce growth at −0.711%. Its projected 10-year growth in output 23.2%, is also lower than the projected national growth in output of 24.2%.
The aerospace impact has been felt by multiple airlines that rely on Boeing to run their fleet. Alaska Air Group, the company involved in the mid-air incident, announced that it anticipates a $150 million decrease in profits for 2024 due to the grounding of its 737 MAX 9 aircraft for over two weeks. United and Delta Airlines have also been anticipating receiving fewer aircraft from Boeing than initially planned, prompting them to reduce their pilot hiring projections.
“As much as I would like those deliveries, you know, this is not a 12-month issue. This is a two-decade issue,” said United CEO Scott Kirby at an investor conference.
Vacationers may be the ones to bear the brunt of this, as travel ramps up this summer. Ryan Air, a popular European budget airline has already declared they will be making cuts to their June and July Schedules.
Boeing’s suppliers are also affected, namely Spirit Aerosystems, an aerospace manufacturing company that supplied the fuselage to the fated Alaska Airlines flight.
When asked during their fourth-quarter earnings call if the company could expect positive cash flow in 2024, Spirit Aero Systems CEO Mark Suchinski said,
“We’re working hard to improve the overall business financially, give us a little time to digest the situation here. In the coming months, we will be able to give you the answers.” They have since confirmed they are in serious talks with Boeing about a possible acquisition.
Other airlines may benefit from the fallout as well. Spirit Airlines, Winderlich’s default budget travel company, runs its fleet exclusively with Airbuses.
While some outlets and experts are reporting that Airbus is in a position to take back market share, Gillen thinks the federal government will take action to prevent that.
“If they did try to take another 10% from Boeing for example, I would expect that you would see American legislatures, particularly if Trump gets back into power, there would be sanctions put on them (Airbus).”, he said.
Boeing has announced its willingness to welcome further scrutiny from customers interested in assessing its production and quality protocols more closely.
“If the planes aren’t recalled, the prices are reasonable, and the times are good, I would always prefer to fly Southwest,” Winderlich says. Until then, all her future flights will continue to be on Spirit.
