Aviation's wheelers and dealers meet under shadow of MAX crisis

The financiers behind the world's airline industry are gathering for the first time since a mid-air cabin blowout tipped Boeing into a new safety crisis, amid signs of wider disruption to the $150 billion jet industry.

Lessors, bankers and airlines meeting in Dublin, home to a booming global air finance sector, will contemplate the supply consequences of a recent partial grounding of the Boeing 737 MAX 9, following the Alaska Airlines incident earlier in January.

For months, aviation has been struggling to keep pace with a post-pandemic travel boom because of labor and parts shortages.

But widespread outrage over the near-disaster that led to an emergency landing with a gap in the side of an aircraft, though no major injuries, has added a new layer of regulatory risk.

"Demand is more or less a slam dunk; the question is when does the supply catch up?" Rob Morris, head of global consultancy at Ascend by Cirium, said ahead of the week-long Airline Economics conference starting on Monday.

"We have estimated 2026 or 2027, but there must be a risk on the downside now because of the MAX."

The Federal Aviation Administration last week took the unusual step of ordering Boeing to stop increasing 737 MAX production until questions over its quality controls have been addressed.

It has given no indication how long the limit may last. But when it is lifted, industry experts say regulators are expected to add checks that may dampen predictions for industrial growth.

While a previous safety crisis over fatal MAX crashes in 2018 and 2019 prompted regulators to tighten control of aircraft design and development, the blowout and subsequent discoveries of loose bolts elsewhere in the fleet could weigh on production.

That, analysts say, means the two crises will respectively make airplanes harder to develop and then slower to produce.

That's potentially good news for leasing companies that have already placed big plane orders and will now secure a bigger return on their investments, as airlines rush for capacity.

But for airlines it could means a gap in receiving new technology needed to lower costs and reduce emissions, as well as higher lease rates. That in turn could lead to higher fares.

After Boeing faced a barrage of criticism from regulators and politicians, the Dublin event will provide a new test of confidence among the owners representing more than half of the world's airliner fleet.

Several industry commentators, including influential analyst Richard Aboulafia, have called on Boeing CEO Dave Calhoun or other executives and board members to step aside.

Aviation is a close-knit industry with few alternative suppliers and long memories so explicit attacks on serving managements tend to be rare, at least in public.

But investors will pay close attention to the tone of interventions by the heads of top leasing companies like AerCap, SMBC Aviation Capital, Air Lease and Avolon at Monday's opening sessions, several delegates said.

Calhoun has pledged that Boeing will acknowledge errors and ensure that an accident like the Alaska Airlines blowout "can never happen again."