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Global airlines are facing escalating costs and operational pressures due to persistent supply chain challenges in the aerospace industry, according to a new joint report by the International Air Transport Association (IATA) and consulting firm Oliver Wyman. The study, Reviving the Commercial Aircraft Supply Chain, estimates that delayed aircraft and engine deliveries will cost airlines over $11 billion in 2025.

With production constraints affecting major aircraft and engine manufacturers, airlines are being forced to extend the life of older aircraft, slow down fleet renewal and adjust capacity plans despite strong passenger demand.

Record backlog and delayed deliveries

The global commercial aircraft backlog reached a record high of more than 17,000 aircraft in 2024, compared with an average of 13,000 between 2010 and 2019. The slow pace of new deliveries has forced airlines to retain older, less fuel-efficient aircraft longer than planned.

These delays have direct financial impact:

Cost Driver	Estimated 2025 Cost
Higher fuel costs from older aircraft	$4.2 billion
Additional maintenance costs	$3.1 billion
Engine leasing costs	$2.6 billion
Spare parts inventory	$1.4 billion
Total	Over $11 billion

Capacity constraints despite strong demand

Airlines are unable to meet growing passenger demand due to grounded aircraft awaiting parts or maintenance. In 2024:

Passenger demand increased 10.4%
Airline capacity grew 8.7%
Global load factor reached a record 83.5%
Demand growth is continuing into 2025

Root causes: Supply chain strain and market disruptions

IATA and Oliver Wyman attribute the supply chain crisis to:

OEM production bottlenecks
Labour shortages in skilled aerospace manufacturing
Raw material constraints
Geopolitical instability
Limited aftermarket access for Maintenance, Repair and Overhaul (MRO)

“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 $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 to ease underlying bottlenecks,” said Willie Walsh, IATA’s Director General.

Also read → IATA reports 4.6% global passenger demand growth in August 2025

The report proposes four key actions for the aerospace sector:

Open the aftermarket to increase competition in MRO services and spare parts.
Improve supply chain visibility with better data-sharing across suppliers and OEMs.
Enhance predictive maintenance using shared data platforms and AI tools.
Expand repair capacity and accelerate the use of used serviceable materials (USM).

“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 catalyze 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.”

For travel and aviation stakeholders, supply chain delays:

Limit airline fleet growth and restrict new route development
Delay sustainability progress by slowing fleet renewal
Create capacity shortages during peak demand seasons
Increase ticket pricing pressure due to higher operating costs

The report underlines that recovery of the aviation supply chain is a multi-year challenge requiring greater cooperation between airlines, OEMs and regulatory authorities.

reviving-the-commercial-aircraft-supply-chain

Metric	Q3 2025 Result
Avg. hourly jet card rate	$11,257
Avg. without turboprops	$11,602
Pricing basis	Includes fuel, base rate & 7.5% Federal Excise Tax
Demand level	Close to record highs seen in 2021–2022

Metric

Q3 2025 Result

Avg. hourly jet card rate

$11,257

Avg. without turboprops

$11,602

Pricing basis

Includes fuel, base rate & 7.5% Federal Excise Tax

Demand level

Close to record highs seen in 2021–2022

Aircraft Type	Avg. Hourly Rate
Turboprops	$6,418
Very Light Jets	$7,359
Light Jets	$8,309
Midsize Jets	$9,671
Super Midsize Jets	$12,447
Large Cabin Jets	$15,386
Ultra Long-Haul Jets	$19,222

Aircraft Type

Avg. Hourly Rate

Turboprops

$6,418

Very Light Jets

$7,359

Light Jets

$8,309

Midsize Jets

$9,671

Super Midsize Jets

$12,447

Large Cabin Jets

$15,386

Ultra Long-Haul Jets

$19,222

The event gathered innovation teams from oneworld member airlines alongside start-ups, scale-ups and investors to assess how new technologies are being deployed across the aviation industry and identify opportunities for collaboration.

“oneworld member airlines are exploring, investing in and deploying innovation that is reshaping aviation, and they are collectively doing so at an industry-leading rate,” said Nat Pieper, chief executive officer of oneworld. “We have a wealth of expertise across our alliance, uniquely positioning us to bring parties together to share best practices and spark new ideas to solve common challenges at scale.”

Also read → oneworld alliance and Breakthrough Energy Ventures launch SAF investment fund

“Innovation is bigger than one company; if you want to create epic outcomes you need to first connect and then collaborate,” said Michael Augello, CEO of Airbus UpNext, who shared the mission and strategy of UpNext with attendees. “It all starts with open listening and that’s what I have appreciated from my day with the oneworld community. Creating a space to ideate together is a great beginning, I look forward to seeing where it takes us.”

“By combining Breakthrough Energy Ventures’ deep technical and investment capabilities with oneworld’s global aviation expertise, we are getting closer to enabling the technologies that can help deliver cost-effective sustainable aviation fuel at scale” said Max Sabbe, Principal, Breakthrough Energy Ventures. “Collaboration across the aviation and investment communities is essential to accelerate progress and turn promising innovation into lasting impact.”

Accelerating sustainable aviation innovation

Sustainability was a central theme at the summit, reflecting oneworld’s status as the first global airline alliance to commit to net zero carbon emissions by 2050. The alliance highlighted its new USD 150 million joint fund with Breakthrough Energy Ventures to accelerate the development and commercialisation of sustainable aviation fuel (SAF) technologies.

Innovation leaders featured at the summit

Several aviation technology leaders presented their latest developments, including:

JetZero – CEO Tom O’Leary outlined plans for ultra-efficient aircraft design aimed at reducing emissions.
UP.Labs – Airlines Ventures CEO Vicki Nakata explained how cross-industry collaboration fuels innovation.
Volantio – CEO Azim Barodawala demonstrated an AI solution improving passenger management during disruption, already used by Alaska Airlines, Japan Airlines and Qantas.
Loft Dynamics – CEO Fabi Riesen showcased FAA and EASA-approved VR flight simulators designed to reduce training costs and improve safety.

The summit reinforced the increasing importance of strategic innovation partnerships in aviation. For airlines, future competitiveness is expected to be shaped by digitalisation, AI adoption, operational efficiency and sustainability compliance. The event also highlighted how alliances are emerging as platforms for innovation sharing beyond traditional commercial cooperation.

As aviation faces rising pressure to decarbonise and meet evolving passenger expectations, initiatives like the oneworld Innovation Summit illustrate how collaboration is driving industry transformation across markets and technologies.