By Dickson Omobola
International Air Transport Association, IATA, in partnership with Oliver Wyman, a global leader in management consulting and a business of Marsh McLennan, NYSE: MMC, had disclosed that the global aircraft supply chain backlog could cost the airline industry over $11 billion in 2025.
This was revealed in a joint study titled: ‘Reviving the Commercial Aircraft Supply Chain,’ which stated that excess fuel costs ($4.2 billion), additional maintenance costs ($3.1 billion), increased engine leasing costs ($2.6 billion) and surplus inventory holding costs ($1.4 billion) were factors that would drive the increase.
According to the study, with the backlog reaching a historic high of more than 17,000 aircraft in 2024, significantly higher than the 2010 to 2019 backlog of around 13,000 aircraft per year, the slow pace of production was hurting the industry.
On excess fuel costs, the study said: “Airlines are operating older, less fuel-efficient aircraft because new aircraft deliveries are delayed, leading to higher fuel costs.”
On additional maintenance costs, the report stated: “The global fleet is aging, and older aircraft require more frequent and expensive maintenance.”
On increased engine leasing costs, it added: “Airlines need to lease more engines since engines spend longer on the ground during maintenance. Aircraft lease rates have also risen by 20–30 per cent since 2019.”
On surplus inventory holding costs, it noted: “Airlines are stocking more spare parts to mitigate unpredictable supply chain disruptions, increasing inventory costs.”
On what the industry could do, the report proposed: “Open up aftermarket best practices by supporting Maintenance, Repair and Operations, MRO, to be less dependent on OEM-driven commercial licensing models, as well as facilitating access to alternative sourcing of materials and services.
“Enhance supply chain visibility by creating clearer visibility across all supplier levels to spot risks early, reduce bottlenecks and inefficiencies, and use better data and tools to make the whole chain more resilient and reliable.
“Unlock value from data by leveraging predictive maintenance insights, pooling spare parts, and creating shared maintenance data platforms to optimize inventory and reduce downtime.
“Expand repair and parts capacity to accelerate repair approvals, support alternative parts and Used Serviceable Material, USM, solutions, and adopt advanced manufacturing to ease bottlenecks.
“To enact any of these initiatives, the first and most critical step for commercial aerospace industry participants to take is to develop a strategic approach among all stakeholders in the supply chain. The multi-headed challenges facing the industry call for collaboration to progress in the goal of better meeting aircraft production and maintenance demand.”
Adding his voice to the study, IATA’s Director General, Willie Walsh, said: “Airlines depend on a reliable supply chain to operate and grow their fleets efficiently. Now we have unprecedented waits for aircraft, engines and parts and unpredictable delivery schedules. Together these have sent costs spiralling by at least $11 billion for this year and limited the ability of airlines to meet consumer demand. There is no simple solution to resolving this problem, but there are several actions that could provide some relief. To start, opening the aftermarket would help by giving airlines greater choice and access to parts and services. In parallel, greater transparency on the state of the supply chain would give airlines the data they need to plan around blockages while helping OEMs to ease underlying bottlenecks.”
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