IATA Warns Airlines Could Lose $11B in 2025 from Supply Chain Issues

The International Air Transport Association (IATA) has warned that ongoing supply chain issues could result in the global airline industry losing more than $11 billion in 2025.

This disruption primarily stems from delays in aircraft production and parts shortages, which are forcing airlines to continue operating older, less efficient planes for longer than planned, resulting in higher costs and lost fuel savings.

Key points include:

• Airlines are expected to miss out on about $4.2 billion in fuel savings because they must keep aging aircraft flying while waiting for new deliveries.
• Maintenance costs are expected to rise by approximately $3.1 billion, as older planes require more frequent and expensive maintenance.
• Leased engine expenses are projected to add another $2.6 billion to costs, as engines stay in maintenance longer, forcing airlines to lease more spares.

The aviation supply chain is strained by raw material shortages, geopolitical instability, and competition for resources with the defense sector, leading to fewer aircraft deliveries and a record backlog of 17,000 jets as of 2024.

These factors extend aircraft maintenance times and require more hangar space, increasing maintenance, repair, and overhaul (MRO) costs.

Recommended steps include expanding supply capacity, improving forecasting and data sharing, and diversifying suppliers to reduce dependencies.

Check out our dedicated articles to learn about IATA’s role in the aviation industry, IATA accreditation for travel businesses, and the meaning of IATA codes and numbers.

Photo by Clay Banks on Unsplash