Global Airlines Struggle with Supply Chain Woes: Aircraft Deliveries Fall Short, Costs Soar

The International Air Transport Association (IATA) has flagged persistent supply chain challenges as a critical issue impacting airlines worldwide, with effects expected to last into 2025. These hurdles are driving up costs, limiting growth, and delaying the adoption of fuel-efficient aircraft, exacerbating challenges for an industry striving for sustainability.

Rising Fleet Age and Delivery Delays

IATA, representing 340 airlines that account for over 80% of global air traffic, revealed that the average age of the global fleet has reached a record 14.8 years, compared to the 1990-2024 average of 13.6 years.

Aircraft deliveries are significantly lagging behind forecasts:

2024: Estimated 1,254 deliveries—30% below initial predictions.

2025: Projected to rise to 1,802 deliveries, still far short of the earlier forecast of 2,293.

The backlog for new aircraft now stands at an alarming 17,000 planes, doubling the pre-pandemic backlog average. At current production rates, it would take 14 years to clear, compared to six years during 2013-2019. However, delivery rates are expected to improve gradually.

Aircraft on Ground (AOG) and Revenue Losses

Currently, 14% of the global fleet is grounded, with 2% parked for engine inspections. Willie Walsh, IATA’s Director General, warned that this shortage has created a "triple whammy" for airlines:

Revenue loss due to unfulfilled demand.

Increased operating costs with ageing fleets.

Slower progress on environmental goals.

“Load factors are at record highs. Airlines could profitably deploy more aircraft if supply chain issues didn’t hold back deliveries,” Walsh explained.

Impact on Costs and Carbon Goals

Ageing fleets require higher maintenance and burn more fuel, further burdening airlines financially. Leasing rates have surged as airlines scramble to secure capacity, compounding the impact of rising interest rates. Walsh emphasized that airlines are struggling to repair their post-pandemic balance sheets while grappling with these setbacks.

The aviation industry remains committed to achieving net zero carbon emissions by 2050. However, the delays in delivering fuel-efficient aircraft hinder airlines’ sustainability efforts.

“Manufacturers need to step up and fulfill their commitments. Resolving these supply chain bottlenecks is critical to improving both airline performance and environmental outcomes,” Walsh stated.

An Industry in Need of Solutions

The aviation sector's recovery and green transition depend heavily on resolving supply chain issues. Addressing these delays will not only help airlines expand capacity but also accelerate progress toward a more sustainable future.