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The global airline industry has been experiencing stable profitability but further growth continues to be constrained by limited aircraft and engine deliveries, according to the International Air Transport Association’s latest global outlook
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Currently, delivery shortfall has reached 5,300 aircraft
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Order backlog has surpassed 17,000 aircraft
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Aircraft in storage exceeds 5,000 units, one of the highest levels in history
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The mismatch between airline requirements and production capacity is unlikely to be addressed until 2031-2034
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These supply chain bottlenecks are estimated to cost the airline industry over $11 billion this year alone
The global airline industry has been experiencing stable profitability but further growth continues to be constrained by limited aircraft and engine deliveries, according to the International Air Transport Association’s (IATA) latest global outlook.
“While deliveries of new aircraft began to pick up in late 2025 and production is expected to accelerate in 2026, demand is forecast to outstrip the availability of aircraft and engines,” IATA said in a press release.
Currently, delivery shortfall has reached 5,300 aircraft.
The order backlog has surpassed 17,000 aircraft, which is about 60% of the active fleet, much higher than the historical average of about 30% to 40%. IATA said this existing backlog is nearly 12 years of the current production capacity.
Average fleet age of airlines has risen to 15.1 years – computing from 12.8 years for aircraft in the passenger fleet, 19.6 years for cargo aircraft, and 14.5 years for the wide-body fleet.
Aircraft in storage, for all varied reasons, exceeds 5,000 units, one of the highest levels in history despite the severe shortage of new aircraft.
IATA said the mismatch between airline requirements and production capacity is unlikely to be addressed until 2031-2034.
“Airlines are feeling the impact of the aerospace supply chain challenges across their business. Higher leasing costs, reduced scheduling flexibility, delayed sustainability gains, and increased reliance on suboptimal aircraft types are the most obvious challenges,” said Willie Walsh, IATA’s director general.
“Airlines are missing opportunities to strengthen their top-line, improve their environmental performance, and serve customers,” he said.
On the part of travelers, this means “higher costs from the resulting tighter demand/supply conditions,” Walsh added as he called for bolstering efforts to “accelerate solutions before the impact becomes even more acute.”
As production bottlenecks continue, IATA cited new challenges and impacts that are being revealed. These include, among others:
- Delivery delays are compounded by airframe production outpacing engine production, which means newly completed airframes being parked until engines are available; longer timelines for new aircraft certification from 12-24 months to four or even five years; tariffs on metals and electronics resulting from US-China trade tensions
- A shortage of skilled labor, especially in engine and component manufacturing, is constraining production ramp-up plans.
- Fuel efficiency improvements are slowing as the fleet ages
- For air cargo fleet, the risks evolving are shortage in converted aircraft as airlines keep planes in use for passenger operations longer; delays in new wide bodies production; and older cargo aircraft being pushed to age limits
READ: Air cargo demand up for 6th month in Aug 2025 – IATA
These supply chain bottlenecks are estimated to cost the airline industry over $11 billion this year alone, according to recent study by IATA and Oliver Wymann.
The contributing factors are: excess fuel costs ($4.2 billion) with older airplanes; Additional maintenance costs ($3.1 billion; increased engine leasing costs ($2.6 billion); and surplus inventory holding costs (USD 1.4 billion).
To help expedite solutions, the study laid out several considerations such as opening up aftermarket best practices and enhancing supply chain visibility across all supplier levels.
It also called for the expanded use of data in leveraging predictive maintenance insights, pooling spare parts, and creating shared maintenance data platforms to optimize inventory and reduce downtime.
Expanding repair and parts capacity are also seen to accelerate repair approvals, support alternative parts and Used Serviceable Material solutions, and adopt advanced manufacturing to ease bottlenecks.
