The International Air Transport Association (IATA) expects severe supply chain issues to continue to impact airline performance into 2025, raising costs and limiting growth.
The organization representing most of the world’s airlines quantified the scale of the challenges caused by supply chain issues in its latest airline industry outlook:
• Average age of the global fleet has risen to a record 14.8 years, a significant increase from the 13.6 years average for the period 1990-2024.
• Aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018. The estimate for 2024 deliveries is 1,254 aircraft, a 30% shortfall on what was predicted going into the year. In 2025, deliveries are forecast to rise to 1,802, well below earlier expectation for 2,293 deliveries with further downward revisions in 2025 widely seen as quite possible.
• The backlog (cumulative number of unfulfilled orders) for new aircraft has reached 17,000 planes, a record high. At present delivery rates, this would take 14 years to fulfil, double the six-year average backlog for the 2013-2019 period. However, the waiting time is expected to shorten as delivery rates increase.
“Supply chain issues are frustrating every airline with a triple whammy on revenues, costs, and environmental performance,” said Willie Walsh, IATA’s Director General.
“Load factors are at record highs and there is no doubt that if we had more aircraft they could be profitably deployed, so our revenues are being compromised. Meanwhile, the aging fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep it flying,” Walsh added.
IATA says airport safety measures need to be simplified and standardized. (Photo Credit: Wikipedia Commons)
The IATA leader also said that leasing rates have risen more than interest rates as competition among airlines intensified the scramble to find every way possible to expand capacity.
“This is a time when airlines need to be fixing their battered post-pandemic balance sheets, but progress is effectively capped by supply chain issues that manufacturers need to resolve,” Walsh concluded.
Specifically, IATA noted that, persistent supply chain issues at least partially responsible for two negative developments:
• Fuel efficiency (excluding the impact of load factors) was unchanged between 2023 and 2024 at 0.23 litres/100 available tonne kilometers (ATK). This is a step back from the long-term (1990-2019) trend of annual fuel efficiency improvements in the range of 1.5-2.0%.
• Exceptional demand for leased aircraft pushed leasing rates for narrow body aircraft to levels 20-30% higher than in 2019.
IATA states that if aircraft and engine manufacturers could sort out their issues and keep their promises, the result would be a more fuel-efficient fleet.
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