Aerospace Supply Chain Bottlenecks to Stall Airline Growth Until 2031-2034

The International Air Transport Association (IATA) warns that persistent aerospace supply chain bottlenecks are significantly impeding global airline growth, with aircraft and engine shortages expected to continue well into the next decade. According to IATA's latest Global Outlook, the imbalance between airline demand and manufacturing capacity may not normalize before 2031-2034. This prolonged disruption follows years of delivery shortfalls, which now total over 5,300 aircraft, and a record-high order backlog exceeding 17,000 units. This backlog represents nearly 60 percent of the world's active fleet, a substantial increase from the historical 30-40 percent, and equates to almost 12 years of current production capacity. Airlines are struggling to replace their aging fleets, which average 15.1 years across all types, including 12.8 years for passenger aircraft and nearly 20 years for cargo planes. IATA Director General Willie Walsh highlighted the widespread impact on airline operations, citing higher leasing costs, reduced scheduling flexibility, delayed sustainability gains, and increased reliance on suboptimal aircraft. Walsh emphasized that airlines are missing critical opportunities to strengthen their revenue, improve environmental performance, and serve customers, while travelers face elevated costs due to tight demand-supply conditions. The production crisis is compounded by several factors, including constrained engine production due to technical problems and maintenance backlogs, leading to newly built aircraft being grounded awaiting engines. Certification timelines for new models have also stretched from two to five years, further delaying market entry. Beyond manufacturing hurdles, trade tensions, tariffs on metals and electronics, and labor shortages are deepening the supply squeeze. The fragility of supplier networks, often reliant on a few critical parts providers, means minor disruptions can escalate into major production delays. These challenges have serious implications for both efficiency and sustainability. Fuel efficiency improvements, which historically averaged 2 percent annually, slowed dramatically to 0.3 percent in 2025 and are projected to reach only 1 percent in 2026. Consequently, older, less efficient aircraft are being kept in service longer, particularly in cargo operations, as airlines lack replacements. A joint study by IATA and Oliver Wyman estimates the financial toll of these bottlenecks will exceed USD 11 billion in 2025. This includes approximately USD 4.2 billion in extra fuel costs, USD 3.1 billion in higher maintenance expenses, USD 2.6 billion in increased engine leasing charges, and USD 1.4 billion in surplus inventory costs. To address this crisis, the report urges urgent measures such as improving supply chain visibility, expanding maintenance and repair capacity, and reducing dependence on original equipment manufacturers. Additionally, it recommends leveraging predictive maintenance and shared data platforms to minimize aircraft downtime and enhance the overall resilience of the supply network.