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IATA Warns of Prolonged Supply Chain Issues Impacting Airline Performance in 2025

Issue 27 - 6
IATA Warns of Prolonged Supply Chain Issues Impacting Airline Performance in 2025

The International Air Transport Association (IATA) has issued a stark warning that ongoing supply chain disruptions will continue to weigh on airline performance well into 2025, driving up costs and restricting growth.

In its latest industry outlook, IATA outlined the scale of the challenges confronting airlines due to supply chain constraints:

• The global fleet's average age has reached a record-high 14.8 years, a sharp increase from the historical average of 13.6 years between 1990 and 2024.

• Aircraft deliveries have plummeted from a peak of 1,813 aircraft in 2018, with only 1,254 deliveries expected in 2024—30% below initial projections. Although deliveries are forecast to rise to 1,802 in 2025, they remain well below the pre-pandemic forecast of 2,293, with further downward revisions expected.

• The backlog for new aircraft orders has surged to an all-time high of 17,000 planes. At current production rates, fulfilling these orders would take approximately 14 years—double the six-year average backlog recorded between 2013 and 2019. However, IATA anticipates a reduction in wait times as production rates improve.

• Roughly 14% of the global fleet (around 5,000 aircraft) remains parked, a figure that, while improving, is still four percentage points above pre-pandemic levels. Of these, 700 aircraft—approximately 2% of the global fleet—are grounded due to ongoing engine inspections, a situation likely to persist into 2025.

A ‘Triple Whammy’ on Revenue, Costs, and Sustainability

Commenting on the ongoing crisis, IATA Director General Willie Walsh highlighted the significant impact of supply chain disruptions on airline operations.

“Supply chain issues are frustrating every airline, dealing a triple blow to revenues, costs, and environmental performance. With record-high load factors, there’s no question that additional aircraft could be deployed profitably. However, aging fleets are driving up maintenance costs, fuel consumption, and capital requirements. Meanwhile, fierce competition for leased aircraft has pushed leasing rates well above interest rate increases,” Walsh stated.

“This is a time when airlines need to repair their post-pandemic balance sheets, but supply chain challenges are preventing meaningful progress. Manufacturers must step up and resolve these issues.”

Negative Impacts on Efficiency and Costs

IATA also pointed to two key areas where supply chain issues are hampering industry progress:

• Fuel efficiency stagnation: Excluding the effects of high load factors, fuel efficiency remained unchanged at 0.23 liters per 100 available tonne-kilometers (ATK) between 2023 and 2024. This marks a significant departure from the long-term trend of annual fuel efficiency improvements of 1.5-2.0% recorded between 1990 and 2019.

• Skyrocketing leasing rates: Surging demand for leased aircraft has driven narrow-body leasing rates up by 20-30% compared to 2019 levels.

Impact on Sustainability Goals

Despite the aviation industry’s collective commitment to achieving net-zero carbon emissions by 2050, Walsh emphasized that airlines are bearing the brunt of supply chain failures.

“The entire aviation sector is aligned in its decarbonization commitment, but airlines are shouldering an unfair burden. Supply chain breakdowns are slowing progress on fleet modernization, making it harder for airlines to cut emissions. If manufacturers fulfilled their commitments and resolved their ongoing issues, the industry would have a more fuel-efficient fleet in the skies,” he said.

With supply chain constraints expected to persist into 2025, IATA continues to call on aircraft and engine manufacturers to accelerate production and deliver on promises made to the industry 


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