Kuala lumpur: The slow pace of production of new aircraft and parts is estimated to cost the airline industry more than US$11 billion in 2025, according to the International Air Transport Association (IATA).
According to BERNAMA News Agency, the organization stated that challenges within the aerospace industry’s supply chain are delaying production. This situation is forcing airlines to reevaluate their fleet plans and keep older aircraft in operation for longer durations.
The commercial aircraft backlog reached a historic high of over 17,000 aircraft in 2024, a significant increase from the 2010 to 2019 average backlog of around 13,000 aircraft per year. This data was cited from a study conducted jointly with management consulting firm Oliver Wyman.
The newly released report, ‘Reviving the Commercial Aircraft Supply Chain’, highlights that the estimated cost of over US$11 billion is driven by four main factors: excess fuel costs from operating older, less fuel-efficient aircraft (US$4.2 billion); addition
al maintenance costs (US$3.1 billion); increased engine leasing costs (US$2.6 billion); and surplus inventory holding costs (US$1.4 billion).
The report also indicates that supply chain challenges are hindering airlines from deploying enough aircraft to meet growing passenger demand. In 2024, passenger demand rose by 10.4%, outpacing the capacity expansion of 8.7% and pushing load factors to a record 83.5%. This trend in rising passenger demand is expected to continue into 2025. IATA director general Willie Walsh emphasized that airlines rely on a dependable supply chain to operate and expand their fleets efficiently.
Walsh noted that while there is no simple solution to these problems, several actions could offer some relief. Opening the aftermarket could give airlines greater choice and access to parts and services. Additionally, increased transparency regarding the state of the supply chain would provide airlines with the data needed to plan around blockages and assist original equipment manufacturers (O
EMs) in alleviating underlying bottlenecks.