Supply chain delays expected to cost airlines over $11 billion in 2025

These challenges are also limiting airlines' ability to meet rising passenger demand. In 2024, passenger demand grew faster than capacity expansion, resulting in record load factors.

The report attributes the supply chain difficulties to several factors: the economic model of the aerospace industry, disruptions from geopolitical instability, shortages of raw materials, and labor market constraints. It suggests that original equipment manufacturers (OEMs), lessors, suppliers, and airlines should work together on several initiatives to address these issues.

Willie Walsh, IATA’s Director General, stated: “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. 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.”

Among the proposed actions are supporting maintenance operations with less dependence on OEM-driven licensing models; improving visibility across all supplier levels; leveraging predictive maintenance data; pooling spare parts; expanding repair and parts capacity; and adopting advanced manufacturing methods.

The report emphasizes that collaboration among all stakeholders is essential for progress toward meeting production and maintenance demands.

Matthew Poitras, Partner in Oliver Wyman’s Transportation and Advanced Industrials practice said: “Today’s aircraft fleet is larger, more advanced, and more fuel efficient than ever before. However, supply chain challenges are impacting airlines and OEMs alike. 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.”

Further information about aviation supply chains can be found through IATA’s communications channels.