“We believe these issues should result in increased grounding of aircraft as affected jets undergo inspections and repairs, likely disrupting capacity ramp-up for airlines. With airlines facing a combination of strong travel demand and continued delays in new aircraft deliveries from original equipment manufacturers, we expect airlines to make up for lost capacity by extending the service life of older aircraft and reinstating inactive aircraft,” they add.
CGS International is keeping “overweight” on the airport services sector as issues with newer generation aircraft and engines continue to surface into 2024.
Analysts Lim Siew Khee and Kenneth Tan explain that this will be driven by the widespread recall of geared turbofan engines (GTF) and increased inspections of specific Boeing aircraft models such as the B737 MAX and B787.
