October 23, 2025
IATA says supply chain challenges could cost airlines more than $11 billion in 2025
The International Air Transport Association (IATA) reports that challenges within the aerospace industry's supply chain are delaying production of new aircraft and parts, resulting in airlines reevaluating their fleet plans and, in many cases, keeping older aircraft flying for extended amounts of time.
The worldwide commercial backlog reached a historic high of more than 17,000 aircraft in 2024, significantly higher than the 2010 to 2019 backlog of around 13,000 aircraft per year.
The slow pace of production is estimated to cost the airline industry more than $11 billion in 2025, driven by four main factors:
• Excess fuel costs (~$4.2 billion): Airlines are operating older, less fuel-efficient aircraft because new aircraft deliveries are delayed, leading to higher fuel costs.
• Additional maintenance costs ($3.1 billion): The global fleet is aging, and older aircraft require more frequent and expensive maintenance.
• Increased engine leasing costs ($2.6 billion): Airlines need to lease more engines since engines spend longer on the ground during maintenance. Aircraft lease rates have also risen by 2030% since 2019.
• Surplus inventory holding costs ($1.4 billion): Airlines are stocking more spare parts to mitigate unpredictable supply chain disruptions, increasing inventory costs.
In addition to the mounting costs, supply chain challenges inhibit airlines from deploying sufficient aircraft to meet growing passenger demand. In 2024, passenger demand rose 10.4%, exceeding the capacity expansion of 8.7% and pushing load factors to a record 83.5%. The trend in rising passenger demand continues into 2025.
The current aerospace industry economic model, disruptions from geopolitical instability, raw material shortages and tight labor markets all contribute to the origin of the matter. With these underlying causes considered, the report outlines key initiatives for original equipment manufacturers (OEMs), lessors, and suppliers supported by airlines to confront the supply-demand imbalance and build greater resilience.
Source: IATA