The International Air Transport Association (IATA), in partnership with global consulting firm Oliver Wyman (a business of Marsh McLennan, NYSE: MMC), has released a comprehensive study titled Reviving the Commercial Aircraft Supply Chain.
The report examines the escalating supply chain disruptions plaguing the aerospace sector, outlines their impact on airlines, and proposes initiatives to restore industry resilience.
Severe delays in the production and delivery of new aircraft and parts are forcing airlines to revise fleet strategies—often by extending the use of older, less efficient aircraft. This trend is reflected in the commercial aircraft backlog, which surged to an all-time high of more than 17,000 units in 2024, far above the historical average of around 13,000 per year between 2010 and 2019.
The report warns that continued supply chain disruptions could saddle the airline industry with over $11 billion in additional costs in 2025, driven by four key factors:
Excess fuel costs ($4.2 billion): Airlines are relying on older, less fuel-efficient aircraft due to delayed deliveries, increasing fuel burn and costs.
Higher maintenance costs ($3.1 billion): An aging global fleet leads to more frequent and costly maintenance.
Engine leasing expenses ($2.6 billion): Airlines are leasing more engines to compensate for prolonged maintenance downtimes. Engine lease rates have jumped 20 to 30 per cent since 2019.
Surplus inventory costs ($1.4 billion): Carriers are stockpiling spare parts to hedge against supply unpredictability, increasing inventory costs.
Beyond direct expenses, these challenges limit the industry’s ability to meet surging passenger demand. In 2024, global demand rose by 10.4 per cent outpacing capacity growth of 8.7 per cent and pushing load factors to a record 83.5 per cent . This imbalance is projected to persist into 2025.
The study points to deeper, systemic issues behind the bottlenecks, including outdated economic models, geopolitical instability, material shortages, and labour constraints. To address these, the report proposes a set of collaborative industry actions targeting original equipment manufacturers (OEMs), lessors, suppliers, and 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 $11 billion for this year and limited the ability of airlines to meet consumer demand”, said Willie Walsh, IATA’s Director General.
“There is no simple solution to resolving this problem, but there are several actions that could provide some relief. To start, opening the aftermarket would help by giving airlines greater choice and access to parts and services.
In parallel, greater transparency on the state of the supply chain would give airlines the data they need to plan around blockages while helping OEMs to ease underlying bottlenecks”.
Key recommendations from the report include:
Opening up the aftermarket: Support independent MROs by reducing reliance on OEM licensing models and promoting access to alternative materials and services.
Improving supply chain visibility: Foster transparency at all supplier levels to detect risks early, minimise bottlenecks, and enable proactive decision-making.
Leveraging data for maintenance: Use predictive maintenance, shared platforms, and parts pooling to reduce downtime and optimise inventory.
Expanding parts and repair capacity: Accelerate repair certifications, promote use of alternative parts and Used Serviceable Material (USM), and adopt advanced manufacturing methods.
The report emphasised that strategic alignment among all players in the supply chain is essential to overcome these complex, multi-faceted issues.
“Today’s aircraft fleet is larger, more advanced, and more fuel efficient than ever before”, said Matthew Poitras, 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 catalyse 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”.
The study serves as a call to action for the global aerospace community to address systemic vulnerabilities and ensure the industry is equipped to meet the demands of a growing, modernised fleet.