Supply Chain Challenges Persist, Impacting Airline Performance into 2025

The International Air Transport Association (IATA) has projected that severe supply chain disruptions will continue negatively impacting airline performance into 2025, increasing operational costs and constraining growth potential.

The latest IATA Airline Industry Outlook highlights several key challenges:

• Rising Fleet Age: The global fleet’s average age has reached a record 14.8 years, significantly up from the 13.6 years average recorded between 1990 and 2024.
• Declining Aircraft Deliveries: Aircraft deliveries have dropped sharply from 1,813 units in 2018 to an estimated 1,254 in 2024 30% below projections. Although deliveries are forecast to rise to 1,802 units in 2025, this remains far below the 2,293 initially expected.
• Record Backlogs: The backlog of unfulfilled aircraft orders now stands at 17,000, the highest in history. The six-year average backlog from 2013 to 2019 would take 14 years to clear at current delivery rates.
• Parked Aircraft: Around 14% of the global fleet (approximately 5,000 aircraft) remains parked, including 700 grounded for engine inspections. While this is an improvement, the percentage of parked aircraft is still 4 percentage points higher than pre-pandemic levels.

Revenue, Costs, and Environmental Setbacks

“Supply chain issues are a triple whammy for airlines eroding revenues, inflating costs, and undermining environmental performance,” said Willie Walsh, IATA Director General.

• Revenue Losses: Load factors are at record highs, but airlines are constrained by a lack of available aircraft to deploy profitably.
• Rising Costs: Maintenance expenses are increasing as airlines operate ageing fleets with higher fuel consumption. Additionally, intense competition for leased aircraft has pushed leasing rates 20–30% above 2019 levels, outpacing interest rate hikes.
• Environmental Challenges: Fuel efficiency improvements have stalled. Excluding the impact of load factors, fuel efficiency was stagnant at 0.23 litres per 100 available tonne kilometres (ATK) between 2023 and 2024, falling short of the long-term trend of 1.5–2.0% annual improvement.

Walsh emphasised that manufacturers' inability to meet delivery promises is slowing progress toward the aviation sector’s net-zero carbon emissions goal for 2050. "If aircraft and engine manufacturers could resolve these issues, airlines could accelerate fleet modernisation and achieve significant fuel efficiency gains," he stated.

As the aviation industry grapples with unprecedented supply chain disruptions, Brookfield Aviation International hopes for a better future for its partners. We hope that airlines navigate these turbulent times.

Additionally, we hope that the manufacturers, operators, and investors address the systemic issues impacting fleet deliveries and modernisation. It is a crucial time for everyone who is associated with aviation to join hands and make our necessary contribution and aim to empower the sector to overcome these challenges, ensuring sustainable growth and progress toward environmental goals.

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