Widespread Supplier Issues Persist for American and United Airlines

"Boeing isn't the only company facing struggles," stated Robert Isom, CEO of American Airlines, during the Bernstein Strategic Decisions Conference in New York. "Other suppliers significantly affect the industry's capacity production, and many have notably fallen behind."

Isom pointed to Honeywell as an example, noting that the company has admitted to a backlog of overdue orders, particularly for aftermarket clients.

"Our primary focus at Honeywell Aerospace is to keep investing in the aftermarket, to enhance the supply base, and to continue supporting our customers," Honeywell Aerospace President and CEO Jim Currier said at a recent Bank of America investor event.

Isom acknowledged that stabilizing the supply chain will require time. A recent Accenture survey of supplier executives indicates growing confidence in the commercial supply base. However, he believes that addressing major issues, such as Boeing's ongoing quality challenges, will involve short-term difficulties but will be beneficial for long-term stability.

"We've discussed our issues with Boeing, and much work remains," Isom said. "They need to ensure they deliver quality aircraft consistently. I've communicated to Boeing that it’s essential to focus on getting the quality right, even if it means facing some immediate setbacks. I trust that Boeing will manage this."

Both American and United Airlines have significant investments in the 737 MAX and 787 programs, which have been most affected by Boeing’s recent challenges. United Airlines also has a substantial order for 180 Airbus A320neos, equipped with Pratt & Whitney PW1100G geared turbofan engines. While only a few of these aircraft have been delivered, they are already undergoing unscheduled engine removals to inspect and replace parts potentially affected by contaminated powder metal. United Airlines CEO Scott Kirby expressed more concern over Pratt’s issues compared to Boeing’s.

"The GTF issue is arguably more severe than Boeing's," Kirby noted, adding that despite considering the U.S. air traffic control staffing shortage as the biggest constraint, "supply chain problems are pervasive."

One significant issue—Boeing’s extended 737-10 certification program—prompted United to remove the model from its fleet plan earlier in 2024. Although the airline did not cancel its 80-aircraft order, it moved to address the capacity gap by acquiring 35 A321neos from two lessors.

Unlike its existing A321s, these leased aircraft will be powered by CFM Leap 1A engines. While the Leap engines have not been entirely free of issues, they have proven more reliable than the GTFs and do not require widespread unscheduled inspections or parts life-limit reductions due to production problems. "Our new [A321neos] that we’re leasing have Leap engines because of this," Kirby said.