Supply chain challenges leading to a slow pace of aircraft production could cost the airline industry more than $11 billion in 2025, according to a new study released by the International Air Transport Association (IATA) and management consultancy Oliver Wyman.

The study found that challenges within the aerospace industry supply chain are delaying production of new aircraft and parts, resulting in airlines reevaluating their fleet plans and, in many cases, keeping older aircraft flying for extended amounts of time, as well as preventing them from keeping up with growing demand for passenger travel.

The worldwide commercial backlog reached a historic high of more than 17,000 aircraft in 2024, significantly higher than the 2010 to 2019 backlog of around 13,000 aircraft per year, IATA and Oliver Wyman said in the study. The slow pace of production is estimated to cost the airline industry more than $11 billion in 2025.

That is driven by four main factors: around a $4.2 billion impact from excess fuel costs as airlines continue to operate older, less fuel-efficient aircraft; around $3.1 billion in additional maintenance costs linked to an aging fleet; $2.6 billion in increased engine leasing costs as engines spend longer on the ground for maintenance and surplus inventory holding costs of $1.4 billion as airlines stock more spare parts to lessen the impact of unpredictable supply chain disruptions.

Aircraft lease rates have also risen by 20-30% since 2019.

Looking beyond the direct costs, the study notes that supply chain challenges are preventing airlines from operating enough aircraft to meet growing passenger demand, with a 10.4% increase in passenger demand in 2024 exceeding capacity expansion of 8.7%, pushing load factors up to a record 83.5%.

The trend in rising passenger demand is continuing in 2025, IATA said.

The report also highlights disruptions from geopolitical instability, raw material shortages and tight labor, and sets out key initiatives that it says would help manufacturers, lessors, and suppliers supported by airlines to build greater resilience.

The recommendations include opening up MRO to be less dependent on OEM-driven commercial licensing models; enhancing supply chain visibility to spot problems early and reduce inefficiency, including through better use of data; making use of predictive maintenance insights; pooling spare parts and creating shared maintenance data platforms to optimize inventory; reducing downtime and expanding repair and parts capacity to accelerate repair approvals; support alternative parts and Used Serviceable Material (USM) solutions and adopt advanced manufacturing to ease bottlenecks.

"There is no simple solution to resolving this problem, but there are several actions that could provide some relief," IATA Director General Willie Walsh said. "To start, opening the aftermarket would help by giving airlines greater choice and access to parts and services. In parallel, greater transparency on the state of the supply chain would give airlines the data they need to plan around blockages while helping OEMs to ease underlying bottlenecks."

For any of the initiatives to work, a strategic approach among stakeholders is needed, IATA and Oliver Wyman said.

"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. We see an opportunity to catalyze an improvement in supply chain performance that will benefit everyone, but this will require collective steps to reshape the structure of the aerospace industry and work together on transparency and talent."

Supply Chain Challenges Could Cost Airlines $11B In 2025: IATA | Aviation Week Network