New Delhi: Aerospace supply chain bottlenecks continue to hold back airlines across the world as aircraft and engine shortages persist, according to the International Air Transport Association's (IATA) latest Global Outlook.
Despite a gradual rise in deliveries toward the end of 2025 and expectations of faster production in 2026, the demand for aircraft is set to outpace supply well into the next decade. IATA says the imbalance between airline requirements and manufacturing capacity may not normalise before 2031-2034, after years of delivery shortfalls and record-high order backlogs.
Delivery shortfalls now total over 5,300 aircraft, while the order backlog has climbed beyond 17,000, equal to almost 60 per cent of the world's active fleet. Historically, this figure hovered around 30-40 per cent. The backlog represents nearly 12 years of current production capacity. With an ageing fleet averaging 15.1 years, including 12.8 years for passenger aircraft and almost 20 years for cargo planes, airlines are struggling to replace older jets at the required pace.
"Airlines are feeling the impact of the aerospace supply chain challenges across their business. Higher leasing costs, reduced scheduling flexibility, delayed sustainability gains and increased reliance on suboptimal aircraft types are the most obvious challenges," said Willie Walsh, IATA's Director General.
"Airlines are missing opportunities to strengthen their top-line, improve their environmental performance and serve customers. Meanwhile, travellers are seeing higher costs due to tighter demand/supply conditions. No effort should be spared to accelerate solutions before the impact becomes even more acute," he added.
According to the IATA report, several issues have compounded the production crisis. While airframe manufacturing has picked up, engine production remains constrained by technical problems and maintenance backlogs.
Some newly built aircraft are grounded waiting for engines. Certification timelines for new models have also stretched from the usual two years to as long as five years, delaying the entry into service of new aircraft. Trade tensions, tariffs on metals and electronics, and labour shortages have deepened the supply squeeze. The fragility of supplier networks, often dependent on a handful of critical parts providers, means even minor disruptions can snowball into major production delays.
The consequences for efficiency and sustainability are serious. Fuel efficiency, which had been improving by around 2 per cent each year, slowed sharply to 0.3 per cent in 2025 and is expected to reach only 1 per cent in 2026. Older, less efficient planes are being used longer, especially in cargo operations, as airlines postpone retirements due to a lack of replacements.
A recent study by IATA and Oliver Wyman estimates that the financial toll of these bottlenecks will exceed USD 11 billion in 2025. This includes about USD 4.2 billion in extra fuel costs, USD 3.1 billion in higher maintenance expenses, USD 2.6 billion in increased engine leasing charges, and USD 1.4 billion in surplus inventory costs.
The report calls for urgent measures, including improving supply chain visibility, expanding maintenance and repair capacity, and reducing dependence on original equipment manufacturers.
It also recommended using predictive maintenance and shared data platforms to reduce downtime and strengthen the supply network's resilience. (ANI)