Due to a strike that has occurred 12,438 kilometers away from the country, or rather from Mumbai, the country’s airlines have started to breathe with difficulty. In fact, this strike is taking place at Boeing, one of the largest aircraft manufacturers in the world. It has orders to manufacture aircraft for the country’s airlines such as Akasa, SpiceJet, Air India Express. Due to this strike, aircraft production has been severely disrupted.
According to reports, thousands of Boeing employees went on strike on Friday after rejecting the Boeing company’s contract offer, marking the first strike at Boeing in 16 years. This disruption came as Boeing wants to ramp up aircraft production after the safety crisis. It is also expected to shut down operations in the Seattle area, where most of Boeing’s commercial aircraft are manufactured. The New York Times said this could create further problems for the company’s already strained supply chain.
A Live Mint report says that its impact is expected to be felt across the airline industry in India. Indian airlines such as Akasa Air, Air India Express and SpiceJet may face such disruptions, including delays in aircraft deliveries and potential missed opportunities for expansion and financial gains. The duration of the strike remains uncertain, though both Boeing and the union are expected to return to talks soon.
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Impact of the strike in India
Akasa Air has a few aircraft ready for delivery and recently received its 25th aircraft, its first delivery of the financial year starting February 2024. The delay in receiving this aircraft may force the airline to postpone its planned expansion and hopes to complete the delivery before the Diwali rush hour. Apart from this, the airline may have to bear a lot of losses due to the delay.
At the same time, Air India Express may also have to bear the brunt of potential delays due to this strike. The airline, a subsidiary of Tata-owned Air India, had announced plans to induct 50 aircraft in 15 months by October 2023. More than 30 aircraft have already been involved in 11 months, and the remaining dozen aircraft are likely to be affected by the attack. This delay may prevent Air India Express from meeting its target of 50 aircraft by mid-January next year. However, the airline may be less worried about sales and leaseback income than Akasa Air, Live Mint said.
SpiceJet, one of the largest airlines in the country, could also be affected by this strike. The airline has placed many orders for MAX aircraft but is currently unable to accept new deliveries, mainly due to financial issues. The budget carrier has already removed several Max aircraft from its fleet due to non-payment of dues by lessors and is facing financial difficulties. The Live Mint report said that the delay in delivery of aircraft due to the strike may increase demand for wet leasing, which will increase costs and indirectly affect SpiceJet.
What is the status of the strike?
According to a New York Times report, in an email to employees, Boeing’s new CEO, Kelly Ortberg, warned that a strike could jeopardize its shared recovery and damage the trust built with customers. The strike involves most of the 33,000 contract-covered workers, represented by District 751 of the International Association of Machinists and Aerospace Workers. The union, Boeing’s largest, is made up primarily of commercial aircraft workers in the Seattle area, with additional members in Portland, Oregon, represented by Small District W24. The union represents about 20 percent of Boeing’s global workforce of more than 170,000 employees.
