The report highlights an alarming situation -- a severe disruption in the aerospace supply chain that is constraining the production and delivery of new aircraft and parts worldwide.

The International Air Transport Association (IATA), in collaboration with Oliver Wyman, a leading global management consulting firm under Marsh McLennan (NYSE: MMC), has released a comprehensive report titled "Reviving the Commercial Aircraft Supply Chain." The study offers an in-depth examination of the systemic challenges facing the global aerospace supply chain, outlining the root causes, financial impacts, and potential solutions to restore stability and growth in the aviation sector.

The report highlights an alarming situation -- a severe disruption in the aerospace supply chain that is constraining the production and delivery of new aircraft and parts worldwide. As a result, airlines are being forced to extend the operational life of older, less fuel-efficient aircraft, driving up operational costs and delaying fleet modernization plans.

In 2024, the global commercial aircraft backlog hit a record 17,000 aircraft, compared to an average backlog of around 13,000 per year between 2010 and 2019. The slowdown in aircraft production has become a major financial burden for airlines, collectively estimated to cost the industry over $11 billion in 2025 alone.

The report attributes this unprecedented financial hit to four major factors:

The supply chain bottlenecks have created a ripple effect across the aviation ecosystem, limiting the ability of airlines to expand capacity and meet the surging demand for air travel.

In 2024, global passenger demand rose by 10.4%, outpacing capacity growth of 8.7% and driving load factors to a record 83.5% -- the highest in aviation history. With demand expected to continue rising in 2025, the inability to scale up aircraft availability threatens to constrain airline profitability, disrupt route expansion, and delay fleet renewal programs critical for sustainability targets.

The IATA-Oliver Wyman report identifies multiple underlying causes behind the prolonged supply chain crisis, describing it as a "multi-headed challenge" that requires collective, industry-wide action.

Key drivers include:

Commenting on the findings, Willie Walsh, Director General of IATA, emphasized that the supply chain crisis has become one of the most urgent challenges facing the global aviation industry.

"Airlines depend on a reliable supply chain to operate and grow their fleets efficiently. Now we have unprecedented waits for aircraft, engines, and parts, along with unpredictable delivery schedules. Together these have sent costs spiraling by at least $11 billion this year," Walsh stated.

"There is no simple solution, but several actions could provide relief. Opening the aftermarket to competition would give airlines greater choice and access to parts and services. Greater transparency across the supply chain would also help airlines plan around blockages while enabling OEMs to ease underlying bottlenecks."

The report calls for OEMs, suppliers, lessors, and airlines to collectively reshape the aerospace supply chain model, moving away from traditional siloed operations toward greater transparency, collaboration, and innovation.

To address systemic inefficiencies and build long-term resilience, the IATA-Oliver Wyman report outlines four key action areas for stakeholders across the aerospace value chain:

The report emphasizes that implementing these initiatives requires a strategic, coordinated approach across all tiers of the supply chain -- from raw material suppliers and component manufacturers to airlines and regulators.

Matthew Poitras, Partner in Oliver Wyman's Transportation and Advanced Industrials practice, highlighted the urgency for collective action and systemic reform.

"Today's aircraft fleet is larger, more advanced, and more fuel-efficient than ever before. However, supply chain challenges are impacting airlines and OEMs alike," Poitras said.

"We see a major opportunity to catalyze an improvement in supply chain performance that will benefit everyone -- but this will require the industry to reshape its structure, prioritize transparency, and invest in talent and digital innovation."

The study urges all stakeholders to recognize that the aerospace industry's economic model must evolve to reflect the realities of post-pandemic operations, global geopolitical tensions, and the accelerating demand for sustainable aviation.

The IATA-Oliver Wyman collaboration calls for a new era of industrial cooperation in aerospace manufacturing and maintenance. By integrating data-driven planning, diversified sourcing, and open aftermarket practices, the aviation sector can enhance productivity, contain costs, and meet global passenger demand sustainably.

As global air travel continues to rebound and sustainability targets tighten, a revitalized supply chain will be essential for ensuring safe, efficient, and environmentally responsible growth across the aviation industry.

IATA-Oliver Wyman Report Calls for Urgent Reforms to Revive Global Aircraft Supply Chain | Other