Aircraft deliveries are falling behind schedule, leading to a growing backlog, according to a new report by the International Air Transport Association (IATA). The trade group, which represents 350 airlines, cites persistent delivery delays as the primary cause.
Aircraft delivery delays at record highs
The IATA, in a recent update to its financial outlook for the airline industry in 2025 highlighted major issues in the supply chain. According to the IATA report, the aircraft backlog has peaked at a record high of 17,000 aircraft, a massive increase from the pre-pandemic backlog levels of 10,000-11,000 aircraft. Deliveries are 30 percent below their peak levels.
It also discussed the potential impacts of tariffs and the ongoing discussions regarding multilateral agreements between states. IATA said:
Should states exit from a multilateral agreement, exempting aircraft from tariffs, supply chain constraints and production limitations could be further aggravated.”
Supply chain issues
The report highlighted the negative impact of supply chain issues on the airlines. The airlines are facing increased leasing costs. The average fleet age has also risen to 15 years up from 13 years in 2015, along with the fleet replacement rate being cut down to half of the 5-6 percent levels of 2020. An older fleet equals less efficiency in terms of fleet safety. One instance that the report shares is airlines having to use larger aircraft on certain routes that do not need them.
Expected aircraft deliveries in 2025 total 1,692 aircraft, the highest level since 2018. However, these numbers are around 26 percent lower than the estimates made a year ago.
These estimates are expected to be lowered even further as supply chain issues are expected to continue in 2025, up until the end of the decade.
The IATA estimates that the airlines would be short of 5,400 aircraft, constituting 18 percent of their active fleet, if the backlog were assumed to be caused solely by delivery delays. It said that the issues may take two to five years to be resolved, given the estimated annual production of around 2,000 aircraft.
Grounded aircraft is a major issue
The report further said that the situation has been worsened due to engine issues and “a shortage of spare parts.”
This has caused “record-high groundings of certain aircraft types.” Currently, over 1100 aircraft younger than ten years are sitting in storage, making up 3.8 percent of the total fleet, up from 1.3 percent ideal fleet percentage as recorded in 2015. Around 70 percent of these grounded aircraft were fitted with PW1000G engines. For instance, the Pratt & Whitney engine issues have caused budget airline Wizz Air to ground around 44 planes over the past year, according to the airline’s latest investor presentation.
Willie Walsh, IATA’s Director General, said:
“Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted so long. And indications that it could take until the end of the decade to fix them are off-the-chart unacceptable.”
He further said:
“IATA will help with solutions to bring more transparency and efficiency to the parts market. And, to avoid the situation getting worse, we advocate keeping aerospace outside of trade wars. But real solutions must come from the manufacturers. The only thing I can say is that solutions cannot come fast enough.”
The trade association expects the revenues of airlines to remain broadly flat in 2025 when compared to 2024. It has forecast a net profit of 36 billion U.S. dollars at a 3.7 percent net profit margin.
How do you think this backlog will affect airlines and passengers? Share your insights in the comments!
