Aerospace supply chain shortage slows aircraft deliveries and growth

Aircraft availability remains one of the biggest limits on airline growth, according to an updated analysis from the International Air Transport Association (IATA). The association said deliveries began to improve in late 2025 and production is expected to accelerate in 2026, but demand will still be higher than the supply of aircraft and engines. IATA said this imbalance is unlikely to normalise before 2031-2034 because of delivery losses over the last five years and a record order backlog.

IATA’s outlook shows delivery shortfalls now total at least 5,300 aircraft. The order backlog has crossed 17,000 aircraft, equal to almost 60% of the active fleet. Historically, this ratio was around 30-40%. The current backlog is equivalent to nearly 12 years of production. The average fleet age has reached 15.1 years, including 12.8 years for passenger aircraft, 19.6 years for cargo aircraft and 14.5 years for wide-body aircraft. Despite a severe shortage of aircraft, more than 5,000 aircraft are still in storage for various reasons.

Willie Walsh, IATA’s Director General, said airlines are feeling the impact of supply chain challenges across their business. He said the problems are raising leasing costs, reducing scheduling flexibility and delaying sustainability gains. Airlines are also relying more on less optimal aircraft, missing opportunities to grow revenue, improve environmental performance and serve customers. Travellers are experiencing higher costs because of tighter demand and supply. Walsh said that all efforts should be made to find solutions before the impact becomes even more severe.

As production bottlenecks continue, new complications are emerging. Airframe production is moving faster than engine production, which is constrained by issues with existing engines. Some newly completed aircraft are being parked until engines are available. Certification timelines for new aircraft have also grown, moving from 12-24 months to four or five years, which is affecting entry into service, especially for long-haul fleet renewal. Tariffs on metals and electronics linked to US-China tensions have worsened bottlenecks and increased some maintenance costs. A shortage of skilled labour, especially in engine and component manufacturing, is holding back production ramp-up plans. The supply chain remains fragile as it often depends on a small number of suppliers for critical parts, making small disruptions difficult to fix and resulting in long delays.

Fuel efficiency gains are slowing as the fleet ages. Historically, fuel efficiency improved by 2% per year, but this dropped to 0.3% in 2025 and is expected to reach 1% in 2026. The air cargo fleet is also facing challenges. Airlines are keeping passenger aircraft in service for longer, which reduces the supply of aircraft available for cargo conversion. Production of new wide-body aircraft is delayed, and older cargo aircraft that are being used for longer will soon reach limits on their lifespan.

A recent study by IATA and Oliver Wyman estimated that supply chain bottlenecks will cost airlines more than USD 11 billion in 2025. Excess fuel costs will reach about USD 4.2 billion as airlines fly older, less fuel-efficient aircraft. Maintenance costs will rise to USD 3.1 billion because older aircraft need more frequent and costly work. Engine leasing costs will increase by USD 2.6 billion as engines spend more time in maintenance and lease rates have risen by 20-30% since 2019. Surplus inventory holding costs will reach USD 1.4 billion as airlines stock more spare parts to manage unpredictable disruptions.

The study suggested several considerations to help expedite solutions. These include supporting Maintenance, Repair and Operations to be less dependent on OEM licensing and enabling access to alternative sourcing for parts and services. IATA said better visibility across supply levels could help identify risks earlier, reduce bottlenecks and improve resilience. The study also noted the need to use data more widely to support predictive maintenance, pooled spare parts and shared maintenance platforms. Expanding repair and parts capacity could also help speed up repair approvals, support alternative parts and Used Serviceable Material, and use advanced manufacturing to ease pressure on the supply chain.