IATA warns of ongoing supply chain challenges impacting airline performance into 2025, BA

The International Air Transport Association (IATA) has warned that significant supply chain issues will continue to impact airline performance until 2025, leading to increased costs and limited growth. IATA’s latest industry outlook highlights the ongoing challenges faced by airlines, affecting revenue generation, escalating operational costs, and impeding progress on environmental goals.

The average age of the global fleet has reached a record high of 14.8 years, up from 13.6 years during the period 1990-2024. Aircraft deliveries have seen a sharp decline since their peak in 2018, with an estimated 1,254 aircraft set to be delivered in 2024, a 30% shortfall from previous expectations.

The forecast for 2025 remains low at 1,802 deliveries, significantly below the anticipated 2,293. The backlog of unfulfilled aircraft orders has surged to a record 17,000, representing a waiting time of 14 years at current delivery rates, double the six-year average from 2013 to 2019.

However, as delivery rates increase, the waiting period is expected to shorten. Additionally, around 14% of the global fleet, or approximately 5,000 aircraft, remain “parked,” still higher than pre-pandemic levels. Many of these aircraft are grounded due to necessary engine inspections and ongoing supply chain disruptions.

IATA’s Director General, Willie Walsh, commented on the issue, stating, “Supply chain issues are frustrating every airline with a triple whammy on revenues, costs, and environmental performance.” He explained that despite high load factors and the potential to deploy more aircraft profitably, the ongoing supply chain issues are constraining capacity and inflating costs, especially through rising leasing rates. Walsh also highlighted that fuel efficiency improvements have stalled, with no progress between 2023 and 2024, and leasing rates for narrow-body aircraft have increased by 20-30% compared to 2019 levels.He further emphasized that supply chain disruptions are hindering airlines’ progress towards achieving their net-zero carbon goals, urging aircraft and engine manufacturers to address these issues. This would not only help airlines enhance fuel efficiency but also better support their environmental initiatives.