The slow pace of global airplane production is estimated to cost the aviation industry more than US$11 billion (about N$189 billion) in 2025. Challenges within the aerospace industry’s supply chain are delaying production of new aircraft and parts, resulting in airlines around the world reevaluating their fleet plans and, in many cases, keeping older aircraft flying for extended amounts of time. 

This is according to a joint study conducted by the International Air Transport Association (IATA) in collaboration with Oliver Wyman, a global leader in management consulting and a business of Marsh McLennan. The study, titled, ‘Reviving the Commercial Aircraft Supply Chain’, addresses supply chain challenges in the aerospace industry and explores the root cause of these challenges, the impact on airlines, and initiatives to move the aviation industry forward.

In addition to the mounting costs, supply chain challenges inhibit airlines from deploying sufficient aircraft to meet growing passenger demand. IATA indicated that in 2024, passenger demand increased by over 10% exceeding the capacity expansion of 8.7% and pushing load factors to a record 83.5%. The trend in rising passenger demand continued into 2025.  Meanwhile, the joint study identified four main factors that will cost the aviation industry billions of dollars this year. These factors are excess fuel costs, additional maintenance costs, increased engine leasing costs and surplus inventory holding costs. 

Another indication of slowing production is that the worldwide commercial airplane backlog reached a historic high of more than 17 000 aircraft in 2024, significantly higher than the 2010 to 2019 backlog of around 13 000 aircraft per year.

The current aerospace industry economic model, disruptions from geopolitical instability, raw material shortages and tight labour markets all contribute to the origin of the matter. With these underlying causes considered, the report outlines key initiatives for original equipment manufacturers (OEMs), lessors, and suppliers supported by airlines to confront the supply-demand imbalance and build greater resilience. 

“Airlines depend on a reliable supply chain to operate and grow their fleets efficiently. Now we have unprecedented waits for aircraft, engines and parts and unpredictable delivery schedules. Together these have sent costs spiralling by at least US$11 billion for this year and limited the ability of airlines to meet consumer demand. There is no simple solution to resolving this problem, but there are several actions that could provide some relief. To start, opening the aftermarket would help by giving airlines greater choice and access to parts and services. In parallel, greater transparency on the state of the supply chain would give airlines the data they need to plan around blockages, while helping OEMs (original equipment manufacturers) to ease underlying bottlenecks,” said Willie Walsh, IATA’s Director General.

“Today’s aircraft fleet is larger, more advanced, and more fuel efficient than ever before,” said Matthew Poitras, partner in Oliver Wyman’s Transportation and Advanced Industrials practice. “However, supply chain challenges are impacting airlines and OEMs alike. We see an opportunity to catalyse an improvement in supply chain performance that will benefit everyone, but this will require collective steps to reshape the structure of the aerospace industry and work together on transparency and talent,” he added.

Some of the suggestions for the aerospace industry to consider include enhancing supply chain visibility, unlocking value from data, and expanding repair and parts capacity. However, to enact any of these initiatives, the first and most critical step for commercial aerospace industry participants to take is to develop a strategic approach among all stakeholders in the supply chain. The multi-headed challenges facing the industry call for collaboration to progress in the goal of better meeting aircraft production and maintenance demand.