The airline industry is projected to lose over $11 billion during 2025 due to slow aircraft production, with supply chain issues forcing airlines to keep older planes operational, according to a new International Air Transport Association (IATA) report.
In a joint study, released on October 13, 2025, by IATA together with international management consulting firm Oliver Wyman, the association noted that these supply chain issues are causing airlines to reevaluate their fleet strategies, often resulting in the prolonged use of older aircraft.
“Today’s aircraft fleet is larger, more advanced, and more fuel efficient than ever before,” said Matthew Poitras, Partner in Oliver Wyman’s Transportation and Advanced Industrials practice. “However, supply chain challenges are impacting airlines and OEMs alike.”
Rising costs and aging fleets add pressure on airlines
According to IATA, the slow production of aircraft and supply chain issues are due to the aviation industry’s “economic model, disruptions from geopolitical instability, raw material shortages and tight labor markets”.
In the report, the association asserts that the slow aircraft production rate is linked to delayed fuel efficiency improvements, costing airlines approximately $4.2 billion as they continue to operate older, less efficient aircraft while waiting for the backlog of new aircraft to ease.
Another reason is the rising cost of maintenance, expected to reach a total of $3.1 billion as airlines manage an aging global fleet that requires more frequent and costly support, the report continues.
IATA added that excess engine leasing could contribute to another $2.6 billion this year, while increased spare parts inventories may cost another $1.4 billion as carriers adjust for unpredictable supply chain disruptions.
In addition to the mounting costs, supply chain challenges inhibit airlines from deploying sufficient aircraft to meet growing passenger demand.
In 2024, passenger demand increased by 10.4%, surpassing the capacity expansion of 8.7% and driving load factors to a record high of 83.5%. IATA predicts that this trend of rising passenger demand is expected to remain the same throughout 2025.
Possible steps to ease supply chain strains
“Airlines depend on a reliable supply chain to operate and grow their fleets efficiently,” said Willie Walsh, IATA’s Director General. “Now we have unprecedented waits for aircraft, engines and parts and unpredictable delivery schedules.”
Walsh mentioned that there isn’t an easy fix for this problem, but that there are various steps that could “provide some relief”.
For example, one suggested approach is to promote best practices in the aftermarket by assisting Maintenance, Repair, and Overhaul (MRO) providers to reduce reliance on OEM-driven licensing models.
Other solutions offered up by IATA involve enhancing supply chain visibility to identify risks early, extracting value from data through predictive maintenance insights, and increasing repair and parts capacity to speed up repair approvals and adopt advanced manufacturing to ease bottlenecks.
