New Delhi, October 13
Global airlines could face losses exceeding USD 11 billion in 2025 due to supply chain disruptions that continue to delay aircraft production and parts deliveries, according to a new report released by the International Air Transport Association (IATA) in collaboration with consulting firm Oliver Wyman.
The study, titled 'Reviving the Commercial Aircraft Supply Chain', highlights that these bottlenecks are forcing airlines to keep older planes in service longer, increasing operational costs across the industry.
As per an IATA press release, it warns that the slow pace of aircraft production is hurting airlines at multiple levels. With a record backlog of more than 17,000 commercial aircraft in 2024, up from an average of 13,000 between 2010 and 2019, carriers are struggling to expand fleets in line with passenger demand. The delay has led to an industry-wide ripple effect, driving up fuel, maintenance, and leasing expenses.
According to the report, airlines are expected to spend about USD 4.2 billion more on fuel next year as they operate older, less fuel-efficient aircraft. Maintenance costs are projected to climb by USD 3.1 billion as ageing fleets require more frequent and expensive servicing. Engine leasing expenses may increase by an additional USD 2.6 billion, while spare parts inventory could add USD 1.4 billion to overall costs.
Passenger demand grew by 10.4 per cent in 2024, outpacing the 8.7 per cent increase in available capacity and pushing load factors to a record 83.5 per cent. As demand continues to rise into 2025, the inability to add new aircraft quickly enough remains a pressing issue for airlines.
"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. Together these have sent costs spiralling by at least USD 11 billion for this year and limited the ability of airlines to meet consumer demand," said Willie Walsh, IATA's Director General. He added that improving transparency and opening access to the aftermarket for parts and services could help ease the strain.
Matthew Poitras, Partner at Oliver Wyman's Transportation and Advanced Industrials practice, said that while today's aircraft are more efficient than ever, the industry must collaborate to restore balance. "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," he noted.
— ANI
Reader Comments
Just flew Delhi to Mumbai last week and the plane was clearly old. No wonder ticket prices are so high if airlines are spending billions extra on fuel and maintenance. Something needs to be done urgently.
With India's growing middle class and increasing air travel, this supply chain crisis couldn't have come at a worse time. Our airports are expanding but if airlines can't get new planes, what's the point? Hope the government intervenes.
While I understand the challenges, I feel airlines should be more transparent about these issues. They keep increasing fares but don't explain why. Better communication would help passengers understand the situation.
This is a wake-up call for India to develop our own aircraft manufacturing capabilities. We depend too much on Boeing and Airbus. Time for Make in India to focus on aviation sector too! 🇮🇳
The environmental impact is also worrying. Older planes are less fuel-efficient and produce more emissions. This supply chain issue is affecting sustainability goals across the industry.
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