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IATA: aerospace supply chain bottlenecks limit airlines

Limited aircraft availability continues to constrain the global aviation sector, according to IATA (International Air Transport Association). Despite accelerated deliveries by the end of 2025, demand is expected to exceed supply until at least 2031–2034, due to accumulated delays and a record backlog of over 17,000 units, equivalent to almost 60% of the active fleet.

The average age of aircraft has reached 15.1 years, with more than 5,000 planes out of service. The mismatch between ready-to-use airframes and available engines, long certification times, tariffs on inputs, and a shortage of skilled labor exacerbate the bottlenecks. Cargo aircraft face additional challenges, with limited conversions and an aging fleet.

The financial impact is significant: bottlenecks are expected to cost the sector US$11 billion by 2025, including fuel, maintenance, and engine leasing, in addition to excess inventory. Fuel efficiency is also slowing, with an improvement of only 0.3% in 2025.

IATA suggests expanding after-sales practices, increasing supply chain transparency, using data for predictive maintenance, and expanding repair capacity to reduce delays, improve resilience, and mitigate costs.

Around 5.2 billion passengers are expected to fly, the International Air Transport Association (IATA) said Tuesday in its annual forecast. Although the sector's profit is expected to reach a new record, revenue is being limited by persistent supply chain problems, high geopolitical tensions, regulatory costs, and infrastructure limitations, according to the organization.

Europe is expected to register the highest profit among all regions, with US$14 billion, thanks to disciplined capacity management and strong load factors of local companies. Low-cost airlines in the continent are growing at double-digit rates, driven by domestic tourists, and a strong euro is offsetting some of the inflationary pressure.

"We see Europe, in absolute terms, outpacing the US," said IATA Director General Willie Walsh in an interview with Bloomberg Television. "A weaker US dollar obviously benefits airlines that are not dollar-denominated."

North American profits are expected to rise to $11.3 billion, although expansion is limited by capacity constraints, pilot shortages, engine problems, and rising labor costs. Low-cost airlines also face pressure due to the shrinking US domestic market.

US President Donald Trump's tariffs, the wars in the Middle East and Ukraine, and the tight supply chain have helped raise costs for airlines this year, IATA added.

"One of the things we are seeing in the US is weakening consumer demand because of cost-of-living problems," Walsh stated.

The profit outlook represents a 4% increase compared to this year's US$39.5 billion. Industry revenue is expected to reach US$1.053 trillion.

The backlog of orders at Boeing and Airbus factories is limiting this growth. Carriers are waiting longer to receive new aircraft and, as a consequence, are flying older jets for longer, said Stuart Fox, IATA's director of flight operations and technicals. New aircraft are also taking longer to be certified.

"Supply constraints, and their financial impact, will persist well beyond the short term," according to the projection.