Are you planning to fly during the summer? If you are, you will be one of 4.7 billion people expected to travel in 2024 compared to 4.5 billion in 2019. On a personal level that is good news, on a macro level, the global airline industry is having problems because of production problems at Airbus and Boeing.

In an article by Rajesh Kuman Singh of Reuters, air carriers are spending billions on repairs to keep flying older, less fuel-efficient jets and paying a premium to secure aircraft from lessors. At the same time, some carriers will be trimming their schedules because they have no planes.

According to Martha Neubauer, a senior associate at AeroDynamic Advisory, passenger carriers will receive 19% less aircraft because of production problems from the duopoly of Boeing and Airbus. US carriers will receive 32% less planes because of dependence of Boeing’s 737 Max. In Europe, Airbus as many as 650 A320neo jets could be ground because of a flaw in the RTX Corp’s Pratt and Whitney engines.

Similar to car rentals, there is a healthy aircraft leasing industry and the rates per month to lease an Airbus A320neo or a Boeing 737-8 Max have reached $400,000 a month, the highest since 2008.

If you cannot lease, then planes have to be repaired, repair costs are up 40% at United, Delta and American Airlines.

Last year, American airline companies posted a 4.5% pretax margin, expect it to be down in 2024.

Linking to dividend paying stocks, all industries can be examined from a macro level going down to a micro level for in every industry there are standout companies. Technically they all do the same thing, but some make more profits than others. For the investments you have, you always want to own the best of the breed and as long as they maintain the metrics you will have fewer concerns expect to collect your dividends.

There are more questions than answers, till the next time – to raising questions.