Experts warn Boeing strike could worsen global jetliner shortage

Boeing's first strike in 16 years may exacerbate global shortfalls of jetliners that have been driving up airfares and causing airlines to delay the retirement of their oldest aircraft, executives and analysts said.

US planemaker Boeing's West Coast workers walked off the job at midnight Friday after soundly rejecting a contract proposal, sending production of its workhorse 737 MAX to a grinding halt.

It's the first walkout at Boeing since 2008, and Chief Financial Officer Brian West said an extended walkout could damage output and "jeopardise our recovery."

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"Boeing is a systemically important company for global aviation," Avolon chief financial officer Ross O'Connor told Reuters on Friday.

A strike "could have an impact on production levels, which could exacerbate some of the supply shortages that are in the market at the moment for sure," he said after Avolon announced it had acquired a large portfolio of jets from Castlelake.

Airlines have battled to expand capacity to meet growing demand as supplies of jetliners are restrained by parts shortages, industry-wide recruitment woes and overwhelmed maintenance shops.

Analysts have been warning for a while that the potentially brightest part of an industry's ultra-important business cycle could run out before airlines get a chance to fully enjoy demand.

"It's going to be a significant amount of time before we see that balance. I'm starting to evolve the hypothesis that it won't be (extra) supply that corrects it, but instead a softening of demand," said Rob Morris, global head of consultancy at Cirium Ascend.

Some say high airfares - although good for airlines in the short term - could themselves accelerate that tipping point.

"My view is that (average fares) will rise; and when ticket prices go up, then all other things being equal, you have lower traffic levels," said aviation economist Adam Pilarski, senior vice-president at AVITAS consultancy.

As Boeing freezes production of its most-sold jet, Europe's Airbus is struggling to meet its targets as well.

Airbus's Chief Executive, Guillaume Faury, expressed optimism at a US Chamber of Commerce conference this week that the European planemaker would meet a recently lowered target of 770 deliveries this year following a profit warning and engine supply glitch in the summer.

After a brief spike in deliveries in July, industry sources questioned how comfortably the world's largest planemaker would exceed last year's 735.

Low store aircraft inventory and high utilisation of in-service aircraft suggest a supply squeeze.