Aviation’s supply chain is under intense pressure. Aircraft deliveries fell to just 1,254 in 2024 - about 30% below pre-COVID peaks - while the backlog swelled to a record 17,000 jets. Engine issues alone have grounded hundreds of aircraft, leaving airlines short of capacity.
The impact is severe: supply chain challenges will cost the airline industry more than $11 billion in 2025, driven by delayed fuel savings and higher maintenance costs, as well as excess engine leasing and spares inventory. Other impacts for airlines include delayed growth, increased leasing rates, and longer operational disruptions.
Cost of Supply Chain Challenges in 2025
$4.2 billion in delayed fuel savings
Airlines are flying older, less efficient aircraft while waiting for new deliveries.
$3.1 billion in higher maintenance costs
Aging fleets are more expensive to keep in service.
$2.6 billion in excess engine leasing
Engines spend longer in maintenance, driving up engine lease demand.
$1.4 billion in extra spares inventory
Airlines are stockpiling parts to offset unpredictable supply, and spending more on AOG (Aircraft On Ground) Desks parts exchanges and loans (operational versus capital expenditure impact on airline material budgets), parts “technical robberies” from other aircraft, etc.
More hours per aircraft & extended maintenance
Older aircraft and lack of parts availability (in particular to address non-routine findings) extends time of aircraft base maintenance checks. This results in fewer hangar slots available globally, and higher MRO (Maintenance, Repair & Operations) costs.
Some other impacts of supply chain challenges include:
- Loss of revenue from flight delays & cancellations
- Additional costs from leased spare aircraft
- Higher number of AOGs
- Passenger service disruption compensation
- Aircraft technical configuration degradations, for example from forced component exchanges
Reviving the Commercial Aircraft Supply Chain
This joint IATA-Oliver Wyman report sets out the scale of the challenge and provides practical steps for improvement. Expanding capacity, opening up the MRO aftermarket, improving forecasting and data visibility, and fostering competition and alternative solutions will be critical. Reviving the supply chain is not optional; it is essential for the future of aviation.
Causes of Supply Chain Challenges
Today’s aviation supply chain issues stem from three connected pressures: structural weakness in the aerospace model, fragile supply networks, and shortages of skilled labor. Together, these factors reduce aircraft availability, lengthen maintenance turnaround times, and raise costs across the industry.
1. Structural weakness in the aerospace model
The aerospace business model has shifted. In the areas of engines and systems components, Original Equipment Manufacturers (OEMs) now generate a larger share of their profits from the aftermarket - spare parts, repairs, and maintenance - rather than from selling their equipment for line-fit installation on production aircraft.
For airlines, this shift matters because newer aircraft, while far more fuel-efficient, are also more complex to maintain. Specialized materials and technologies often mean that in too many cases, component repairs are only possible through the OEMs themselves or their commercial licensee networks. For equipment OEMs there is limited interest to further develop new repair solutions, as opposed to selling new replacement spare parts, increasing costs and lead times for airlines.
Leasing, which now covers more than half of the global fleet, adds another layer. Lessors often favour OEM parts and originated repairs for their lease return conditions because it simplifies assets re-marketability. This practice, however, limits the ability of airlines to use other approved parts and approved repairs instructions, which are key solution enablers.
2. Fragile supply chains
Supply networks are under strain from overlapping global pressures. Geopolitical instability has disrupted access to critical materials like titanium, while trade barriers have added friction to cross-border movement of parts.
Material shortages are also slowing production. Metals such as aluminum, steel, and superalloys remain in tight supply, with defense and business aviation competing directly with commercial airlines for the same castings, forgings, and engine capacity. These segments often accept higher prices and shorter terms, leaving airlines squeezed.
The combination of geopolitical shocks, raw material constraints, and competing demand has created deeper supply challenges that the industry cannot quickly resolve.
3. Skilled labor shortages
Labor markets are another structural constraint. A significant share of maintenance and technical staff are approaching retirement age, and large waves of retirements are already underway.
Replacing this experience is not easy. It typically takes two to three years for new technicians to reach full productivity. Recruiting and retaining younger workers has proven difficult, while wage inflation is rising faster than expected.
As a result, airlines and maintenance providers face a growing shortfall of skilled workers, which extends turnaround times and adds further cost pressures.
> Download the full report (pdf)
Call to Action – Our Strategic Priorities
IATA is working with airlines, OEMs, lessors, MROs, parts distributors, and regulators to strengthen the global aviation supply chain. Our strategy focuses on several priorities:
1. Expand materials capacity and repairability
We are working with industry stakeholders to identify and mitigate supply–demand imbalances that limit fleet operations. To achieve this, ongoing initiatives aim at enhancing access to Used Serviceable Materials (USMs), Parts Manufacturers Approvals (PMAs), and to additional approved repair instructions (such as through design regulation approvals e.g., Part 21).
The objective is to help shorten spares lead times and repairs turnaround times. Other initiatives in progress include the development of parts quarantine procedures standards to minimize stocks depletion due to “no faults found”, and e-NOTOCs solutions. These initiatives are anticipated to help protect serviceable stocks through more efficient logistics.
2. Open up aftermarket services and actively support fair competition
OEM dominance in the MRO aftermarket can limit airline choices and increase costs. IATA is pushing for a more open system that allows a broader access to other approved Part 145 MRO providers beyond those under commercial licensing by the OEMs.
Looking ahead, IATA is actively supporting best practices such as independent repair programs and the use of approved alternatives, as well as the active promotion of valuable frameworks already in place. For example, there is merit for airlines to effectively implement the Boeing Product Support Assurance Agreement (PSAA), the Airbus Supplier Support Conditions (SSC), the IATA–Rolls-Royce Statement of Best Practices, and EASA / FAA rules on access to Instructions for Continued Airworthiness (ICA). Together, and when effectively implemented, these enablers can contribute to making supply chains more resilient.
Another positive milestone is the IATA–CFMI Agreement on Engine Maintenance that protects warranties even when other approved (non-OEM) parts and repairs may be used by the airlines, and which also affords independent MROs a fair access to some repair manuals. This is an example of an outstanding adoption of best aftermarket practises from a major OEM which shall be appraised for being one industry leader with such fair industry standards. IATA is pursing adoptions of similar standards from other engine and equipment OEMs.
> More on the IATA Maintenance Cost Technical Group (MCTG)
3. Improve forecasting and data visibility
A resilient supply chain depends on accurate, data-driven enablers. IATA is embarking on a platform project evaluation to facilitate access to supply chain metrics and benchmark information. This is for the benefit of all IATA airlines that may be interested to share their anonymized data through a common and open platform.
It is anticipated that a platform like the IATA MRO SmartHub may be a suitable candidate to host such new (non-commercial) advocacy initiatives.
In addition to the development of more accurate benchmark information, the same platform is currently under consideration to possibly host forecasting data of materials, by connecting airlines and suppliers around the same planning information. An example is to anticipate upcoming peak demands of hard time components resulting from long MPD (Maintenance Planning Document) discard tasks intervals.
4. Develop enhanced standards for traceability and simplicity in handling serviceable parts
Non-value-added practices in record-keeping and fragmented standards increase costs and slow processes, notably during aircraft transitions and parts transactions.
Together with lessors and parts distributors, IATA is working on the development of streamlined standards and templates to reduce duplication, improve compliance, and enable more cost effective assets handovers and spare parts exchanges across the industry – including (but not limited to) on Life Limited Parts (LLPs) during lease returns.
This initiative also includes promoting the latest accreditation standards to strengthen distribution channels of serviceable parts, and thus help airlines materials management teams to further diversify their sourcing process.
Working Groups in Progress
At this moment, IATA has gathered several Advisory Working Groups dedicated to those supply chain initiatives.
Those working groups are constituted by IATA airline members, with the participation of additional contributors, such as lessors, aircraft and engine manufacturers, parts distributors, equipment OEMs, and MROs.