This article is based on an official press release from the International Air Transport Association (IATA) and supplementary industry data.

Aerospace Supply Chain Crisis to Cost Airlines $11 Billion in 2025

The global aviation industry is facing a severe “structural mismatch” between demand and production capacity that shows no signs of resolving before the next decade. According to a critical update released on December 9, 2025, by the International Air Transport Association (IATA), persistent supply chain bottlenecks are projected to cost airlines more than $11 billion in 2025 alone.

Despite a slight increase in aircraft deliveries toward the end of the year, the industry remains constrained by a deficit of at least 5,300 aircraft, a “missing fleet” that has forced carriers to fly older, less efficient jets far longer than planned. A joint study conducted by IATA and consultancy Oliver Wyman suggests that while demand for travel remains robust, the industrial base supporting aviation is fragile, with normalization not expected until the 2031–2034 timeframe.

At AirPro News, we are closely monitoring how these disruptions are reshaping airline economics. The data indicates that the inability to secure new “metal” is no longer just an operational headache; it has become a massive financial drain that is stalling sustainability goals and driving up costs for passengers.

Breaking Down the $11 Billion Financial-Results Hit

The IATA and Oliver Wyman study provides a granular look at where the money is being lost. The $11 billion figure for 2025 is not a monolith but a composite of inefficiencies driven by the need to keep aging fleets airborne.

• Fuel Inefficiency ($4.2 billion): This is the largest single cost driver. Because airlines cannot replace older jets with new neo, MAX, 787, or A350 models, they are burning significantly more fuel. Fuel efficiency improvements have stagnated at just 0.3% in 2025, a sharp drop from the historical average of 2.0% per year.
• Maintenance Costs ($3.1 billion): Older airframes and engines require more frequent and expensive care.
• Engine Leasing ($2.6 billion): Leasing rates have surged 20–30% since 2019. Furthermore, shop visits for engines are taking longer due to parts shortages, forcing airlines to lease spare engines for extended periods.
• Inventory Stockpiling ($1.4 billion): To mitigate the risk of being grounded by a missing widget, airlines are holding significantly more spare parts inventory than usual.

The “Missing Fleet” and Production Stalls

The scale of the backlog is historic. According to the data released, the global order backlog has surpassed 17,000 aircraft. This represents nearly 60% of the active global fleet, a ratio that historically hovers between 30% and 40%. At current production rates, clearing this backlog would take approximately 12 years.

Consequently, the average age of the global fleet has reached a record high of 15.1 years. The situation is particularly acute in the cargo-aircraft sector, where the average aircraft age is now 19.6 years. Passenger-to-freighter (P2F) conversions are stalling because airlines are refusing to retire passenger jets, keeping them in service to meet travel demand rather than releasing them for conversion.

Geopolitical and Industrial Headwinds

While the pandemic created the initial deficit, new challenges in 2024 and 2025 have exacerbated the situation. Industry analysis points to escalating trade tensions between the United States and China as a major disruptor. Tariffs on critical raw materials like aluminum and titanium, along with retaliatory measures affecting aircraft deliveries, have severed established supply lines.

Furthermore, labor shortages remain a critical bottleneck. A lack of skilled workers in engine and component manufacturing is preventing suppliers from ramping up production to meet Original Equipment Manufacturer (OEM) targets. As a result, airframe production is outpacing engine production, leading to “gliders”, completed jets sitting parked without engines, accumulating at production facilities.

Industry Reaction and Strategic Outlook

The consensus among leadership is that the industry must adapt to a long-term environment of scarcity. Willie Walsh, the Director General of IATA, emphasized the breadth of the impact in his statement regarding the report.

“Airlines are feeling the impact… across their business. Higher leasing costs, reduced scheduling flexibility, delayed sustainability gains, and increased reliance on suboptimal aircraft types are the most obvious challenges… No effort should be spared to accelerate solutions before the impact becomes even more acute.”

Willie Walsh, Director General, IATA

Oliver Wyman’s analysis supports this view, warning that the supply-demand mismatch is structural. They urge the industry to adopt “aftermarket best practices,” essentially advising airlines to become experts in extending the life of existing assets rather than banking on new deliveries to solve their problems.

Proposed Solutions

To mitigate the crisis, IATA and Oliver Wyman have outlined a roadmap focused on efficiency and transparency:

• MRO Reform: The industry is calling for a reduction in dependence on OEM-controlled licensing. Opening up the Maintenance, Repair, and Overhaul (MRO) market to more third-party repairs could speed up the sourcing of Used Serviceable Materials (USM).
• Data Sharing: Creating shared platforms for supply chain visibility could help manufacturers spot risks, such as a raw material shortage at a Tier-3 supplier, before they halt a major assembly line.
• Predictive Maintenance: Leveraging AI to predict part failures can optimize the use of scarce inventory, ensuring parts are available exactly when needed.

AirPro News Analysis

The data presented by IATA highlights a paradox in modern aviation: demand is back, but the physical infrastructure to support it is fracturing. The stagnation in fuel efficiency (0.3% vs the expected 2.0%) is perhaps the most damaging long-term consequence. For years, the industry’s net-zero roadmap relied heavily on the continuous introduction of fuel-efficient technology. With that pipeline clogged, airlines may face increased regulatory pressure and higher carbon costs, further squeezing margins.

Additionally, the shift in leverage toward MRO providers and lessors is undeniable. With new aircraft unavailable, those who control the existing stock of engines and spare parts hold the keys to the kingdom. We expect this to drive a wave of consolidation or strategic partnerships in the aftermarket sector throughout 2026.

Sources

Sources: IATA Press Release (Dec 9, 2025); IATA & Oliver Wyman Joint Study (2025); Industry Research Reports (Aviation Week, Leeham News).