IATA warns supply chain woes to hit airline growth

SUPPLY CHAIN bottlenecks are expected to constrain the airline industry’s projected growth as aircraft production delays and rising maintenance costs weigh on carriers’ fleet expansion plans, the International Air Transport Association (IATA) said.

- By Ashley Erika O. Jose

“Challenges within the aerospace industry's supply chain are delaying production of new aircraft and parts, resulting in airlines reevaluating their fleet plans and, in many cases, keeping older aircraft flying for extended amounts of time,” IATA said in a report dated Oct. 13.

According to IATA, a trade association of airlines, the global commercial backlog reached a record high of more than 17,000 aircraft last year, higher than the 2010-2019 average backlog of around 13,000 aircraft annually.

With this, the airline industry could potentially lose over $11 billion in 2025, it said, noting that supply chain issues have led to excess fuel costs, higher maintenance expenses, additional engine leasing costs, and surplus inventory holding costs.

“The current aerospace industry economic model, disruptions from geopolitical instability, rawmaterial shortages, and tight labor markets all contribute to the origin of the matter,” IATA 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,” IATA Director General William M. Walsh said.