The International Air Transport Association (IATA), in collaboration with Oliver Wyman—a global management consulting firm under Marsh McLennan (NYSE:MMC)—has launched a new study titled “Revitalising the Commercial Aircraft Supply Chain.”
The report analyses the challenges within the aerospace supply chain, the underlying causes, and their impact on the airline industry, while offering practical recommendations for the sector’s future.
Supply Chain Issues Straining Airlines
Production delays across the global aviation and aerospace industries are slowing the delivery of new aircraft and parts, forcing airlines to revise their fleet plans. As a result, many carriers are keeping older aircraft in service longer than intended.
As of 2024, the commercial aircraft order backlog has surpassed 17,000 units—an all-time high and well above the 2010–2019 average of 13,000.
The slower production pace is expected to generate over USD 11 billion in additional costs for the airline industry in 2025. According to the report, the main cost drivers include:
Fuel expenses (USD 4.2 billion): Delays in new aircraft deliveries mean airlines must continue operating older, less fuel-efficient jets.
Maintenance costs (USD 3.1 billion): An ageing fleet requires more frequent and expensive maintenance.
Engine leasing costs (USD 2.6 billion): Longer engine turnaround times are driving up leasing demand.
Inventory costs (USD 1.4 billion): Companies are stockpiling spare parts to mitigate supply chain disruptions.
These challenges are also limiting airlines’ ability to meet surging passenger demand. In 2024, passenger traffic grew by 10.4%, while capacity rose by only 8.7%, pushing load factors to a record 83.5%. Strong demand is expected to continue into 2025.
Strategic Collaboration Needed for Industry Resilience
The report highlights that geopolitical instability, raw material shortages, and labour constraints are key factors driving the current supply chain imbalance.
Accordingly, it recommends the following strategic actions for industry stakeholders:
Diversification in the aftermarket: Reduce MRO (Maintenance, Repair, and Overhaul) dependence on OEM-centric licensing models.
Supply chain visibility: Improve transparency across all supplier tiers to detect risks early and prevent bottlenecks.
Data sharing: Utilise predictive maintenance data to optimise inventory and minimise downtime.
Increased repair and manufacturing capacity: Mitigate bottlenecks through alternative parts and advanced production techniques.
IATA Director General Willie Walsh commented on the initiative:
“Airlines need a reliable supply chain to operate their fleets efficiently. Yet today, we’re facing unprecedented delays in aircraft and spare parts. This is driving up costs and limiting our ability to meet passenger demand. Greater transparency and competition in the aftermarket could make the supply chain more resilient.”
Matthew Poitras, Partner for Transportation and Advanced Industries at Oliver Wyman, added:
“While today’s fleets are more advanced and efficient, supply chain bottlenecks are affecting both OEMs and airlines. To build a resilient ecosystem, the industry must take collective steps towards greater transparency, data sharing, and talent development.”
Significance of the Report
The initiative launched by IATA and Oliver Wyman aims to address supply-demand imbalances in the commercial aviation sector and strengthen supply chain resilience.
Through comprehensive analysis, it seeks to alleviate short-term cost pressures while making aircraft production and maintenance processes more sustainable in the long term.
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