IATA report says aircraft supply chain delays costing airlines billions

The International Air Transport Association (IATA) and management consulting firm Oliver Wyman have released a joint study warning that ongoing disruptions in the aerospace supply chain could cost airlines more than US$11 billion in 2025.

The report, Reviving the Commercial Aircraft Supply Chain, outlines how production delays for new aircraft and parts are forcing airlines to keep older planes in service longer. The global commercial aircraft backlog hit a record 17,000 in 2024, up from an average of about 13,000 between 2010 and 2019.

According to the study, slower production has driven up costs in four key areas: fuel (US$4.2 billion), maintenance (US$3.1 billion), engine leasing (US$2.6 billion) and surplus inventory (US$1.4 billion). The delays are also limiting capacity as passenger demand continues to grow, rising 10.4 per cent in 2024 compared with an 8.7 per cent increase in available capacity.

“Airlines depend on a reliable supply chain to operate and grow their fleets efficiently. Now we have unprecedented waits for aircraft, engines and parts and unpredictable delivery schedules,” said Willie Walsh, IATA’s director general. “Together these have sent costs spiralling by at least $11 billion for this year and limited the ability of airlines to meet consumer demand.”

The report cites multiple causes for the bottlenecks, including labour shortages, geopolitical instability and raw material constraints. It recommends industry-wide collaboration and several measures to restore balance, such as increasing transparency across supplier networks, expanding maintenance and repair capacity and opening aftermarket access to reduce reliance on original equipment manufacturers.

“Today’s aircraft fleet is larger, more advanced and more fuel efficient than ever before,” said Matthew Poitras, a partner in Oliver Wyman’s Transportation and Advanced Industrials practice. “However, supply chain challenges are impacting airlines and OEMs alike. We see an opportunity to catalyze an improvement in supply chain performance that will benefit everyone, but this will require collective steps to reshape the structure of the aerospace industry and work together on transparency and talent.”