Aircraft delays to burn $11 billion hole in airlines’ pockets, warns IATA

The world’s airlines are staring at losses of over $11 billion in 2025 as persistent supply chain disruptions continue to throttle aircraft production and delay deliveries, according to a new joint study by the International Air Transport Association (IATA) and consulting firm Oliver Wyman.

Titled 'Reviving the Commercial Aircraft Supply Chain', the report paints a grim picture of an industry struggling to meet soaring passenger demand amid clogged production lines, component shortages, and labour constraints.

Global backlogs have reached a record 17,000 aircraft in 2024, up sharply from the pre-pandemic average of 13,000 between 2010 and 2019. This slowdown has forced airlines to keep older, less fuel-efficient planes in service far longer than planned.

IATA estimates that the financial hit, spread across fuel, maintenance, leasing, and inventory, will exceed $11 billion next year. About $4.2 billion of that comes from excess fuel costs as ageing fleets guzzle more fuel, while $3.1 billion is tied to maintenance of older jets. Engine leasing expenses have also ballooned by $2.6 billion, and spare parts stockpiling has added another $1.4 billion in inventory costs.

The knock-on effect is also being felt by passengers. In 2024, demand rose 10.4 per cent, outpacing capacity growth of 8.7 per cent, pushing load factors to a historic 83.5 per cent. The shortfall in available aircraft means airlines cannot deploy enough capacity to meet demand in 2025 either.

“The industry is now facing unprecedented waits for aircraft, engines and parts, with unpredictable delivery schedules. Together, these have sent costs spiralling by at least $11 billion this year and limited the ability of airlines to meet consumer demand. There’s no simple fix, but several actions could bring relief,” said Willie Walsh, IATA’s Director General.

Walsh said the quickest route to easing the strain would be to “open up the aftermarket”, allowing airlines better access to alternative parts and services beyond the tight control of original equipment manufacturers (OEMs). He also called for greater transparency across the supply chain to help carriers plan around delivery delays.

The study stresses that progress will require industry-wide cooperation among manufacturers, lessors, and airlines to align strategies and strengthen the global supply network.

“Today’s fleet is the most advanced and fuel-efficient in history. But the current supply chain model is under strain. We see an opportunity to reshape the industry’s structure through transparency, data sharing and collaboration,” said Matthew Poitras, partner at Oliver Wyman.