Airlines May Suffer $11B Losses by 2025 Due to Supply Chain Challenges

The airline sector is expected to face losses exceeding $11 billion in 2025 due to sluggish aircraft production. This situation arises from ongoing supply chain challenges forcing airlines to rely on older, less efficient planes, as highlighted in a recent report by the International Air Transport Association (IATA).

In a collaborative study released on October 13, 2025, IATA and the management consulting firm Oliver Wyman explored the impact of these supply chain disruptions. The report emphasizes that airlines are being compelled to reassess their fleet strategies, often leading to the continued operation of aging aircraft.

“Today’s aircraft fleet is larger, more advanced, and more fuel-efficient than ever before,” stated Matthew Poitras, a partner in Oliver Wyman’s Transportation and Advanced Industrials division. “However, supply chain issues are posing significant challenges for both airlines and Original Equipment Manufacturers (OEMs).”

Rising Costs and Aging Fleets Add Pressure on Airlines

According to the report, the gradual pace of aircraft production and ongoing supply chain issues stem from the aviation industry’s economic model, geopolitical tensions, material shortages, and tight labor markets.

The IATA report indicates that the slow production of aircraft has resulted in delayed improvements in fuel efficiency. This delay is costing airlines about $4.2 billion, as they continue to operate older, less efficient planes while waiting for the backlog of new deliveries to clear.

Additionally, maintenance costs are on the rise, projected to reach approximately $3.1 billion as airlines manage an aging global fleet that demands more frequent and costly services.

IATA highlights that excessive engine leasing could lead to an additional $2.6 billion in costs this year, while increased inventories of spare parts may add another $1.4 billion as airlines adjust to unpredictable supply chain disruptions.

These ongoing cost pressures are compounded by the supply chain challenges inhibiting airlines from deploying enough aircraft to accommodate growing passenger demand.

In 2024, passenger demand surged by 10.4%, outpacing the 8.7% capacity expansion, which drove load factors to an all-time high of 83.5%. IATA forecasts that this trend of heightened passenger demand will persist through 2025.

Possible Steps to Ease Supply Chain Strains

“Airlines depend on a dependable supply chain to operate and expand their fleets efficiently,” noted Willie Walsh, IATA’s Director General. He acknowledged that the current prolonged wait times for aircraft, engines, and parts, along with unpredictable delivery schedules, create unprecedented challenges.

While Walsh indicated that there is no straightforward solution, he suggested various steps that could potentially alleviate these issues.

One recommendation involves promoting best practices in the aftermarket by supporting Maintenance, Repair, and Overhaul (MRO) providers in reducing their dependence on OEM-driven licensing models.

Further, IATA proposes enhancing supply chain visibility to detect risks earlier, leveraging data for predictive maintenance insights, and boosting repair and parts capacity to expedite repair approvals. Additionally, employing advanced manufacturing techniques could help mitigate bottlenecks.

What are your thoughts on the current challenges facing the airline industry, and how do you see these evolving in the near future?