The Looming Aircraft Shortage

Air Lease Corp.’s John Plueger, presenting at an Airline Economics conference in New York on Oct. 18, identified several “hot topics” currently facing the airline industry. One was environmental sustainability. Another was the tariff war now affecting Airbus planes exported to the U.S. Also on his list: This year’s spate of airline bankruptcies. Plueger also talked about the weakness in cargo demand and the resiliency of passenger demand, even in China and Europe where airlines continue to ask Air Lease for more and more planes. The demand is there and everywhere.

But the supply isn’t. Before discussing any of these hot topics, Plueger focused on perhaps the hottest topic of all for the worldwide airline business as 2020 approaches: Missing aircraft capacity.

The B737 MAX, grounded since March after two deadly crashes, is of course the leading reason for the shortage. Through August, Air Lease data show, the top 10 MAX users alone saw a reduction of about 25m seats. By now, Plueger says, the number is probably closer to 30m. China Southern tops the list of airlines with lost MAX capacity: 3.7m seats through August. Right behind it are Air Canada, Southwest, Turkish Airlines, Oman Air, American, FlyDubai, SpiceJet, LOT Polish, and Lion Air. All had sizeable MAX fleets at the time of their grounding, and all were scheduled to receive many more MAXs that never arrived.

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