WASHINGTON/DUBLIN, Sept 13 (Reuters) - Boeing's ( BA )

first strike in 16 years could further compound global shortages

of jetliners that have been pushing up airfares and forcing

airlines to keep older jets flying longer, industry executives

and analysts said.

The U.S. planemaker's West Coast workers went on strike at

midnight on Friday after overwhelmingly rejecting a contract

deal, halting production of Boeing's ( BA ) workhorse 737 MAX.

It is Boeing's ( BA ) first strike since 2008, and Boeing ( BA ) Chief

Financial Officer Brian West warned a prolonged walkout could

hurt output and "jeopardize our recovery".

"Boeing ( BA ) is a systemically important company for global

aviation," Ross O'Connor, chief financial officer of Irish

leasing company Avolon, 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 struggled to expand capacity to meet rising

demand as supplies of jetliners are curtailed by parts

shortages, industry-wide recruitment problems and overloaded

maintenance shops.

Analysts have been warning the most promising part of the

industry's all-important business cycle could run out before

airlines have a chance to enjoy the full benefits of 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 air fares - 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 ( BA ) halts production of its most-sold jet, European

rival Airbus is also struggling to meet its goals.

Airbus Chief Executive Guillaume Faury expressed optimism at

a U.S. 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.

But following a short-lived spike in deliveries in July,

industry sources questioned how comfortably the world's largest

planemaker would exceed last year's 735.

Dwindling numbers of planes in storage and record-high

utilization of existing planes confirm the supply squeeze.

FLEET AGE RISING

For now, Boeing's ( BA ) lower production levels compared to

Airbus may limit the incremental effect of the strike. Yet

analysts said airlines have little room to maneuver.

With leasing companies also running out of available

capacity, carriers need to keep existing jets flying longer.

For most of the past 15 years, the average age of the fleet

declined as airlines and leasing companies took advantage of low

interest rates to invest in new fuel-saving jets.

In 2010, the average age of the widely flown single-aisle

jet fleet was about 10.2 years, according to Cirium data.

After dipping to 9.1 years during the pandemic as airlines

grounded fleets, the age started growing again. It now stands at

11.3 years "and still heading upwards," Morris said.

That is despite efforts to reach net zero emissions by 2050,

which rely partly on modernizing the planes in service.

"It must mean that we're burning more CO2 than we should be

because we're using more old aircraft...so one of the things

that can go wrong is sustainability," Morris said.

The airline industry says it is confident of reaching a

target of net zero emissions by 2050.

(Additional reporting by Rajesh Kumar Singh, Allison Lampert;

Editing by David Gregorio)