Supply Chain Pressures: Airlines Face Over USD 11 Billion in Extra Costs in 2025

A new joint analysis by the International Air Transport Association and consulting firm Oliver Wyman indicates that ongoing supply chain disruptions in the aerospace and defense sectors may impose more than USD 11 billion in additional costs on global airlines during 2025.

Underlying Causes & Cost Drivers

The study, titled Reviving the Commercial Aircraft Supply Chain, attributes the projected cost burden to several interlocking pressures across aircraft production, parts manufacturing, and aftermarket logistics.  Key contributing factors are:

• Excess fuel costs (~USD 4.2 billion): Delayed deliveries force airlines to continue operating older, less fuel-efficient aircraft, reducing the anticipated fuel savings from newer types.
• Additional maintenance (+ USD 3.1 billion): Aging fleets require increased maintenance frequency and attention, stretching MRO capacity and increasing cost.
• Engine leasing and replacement (+ USD 2.6 billion): Prolonged engine shop cycles and parts scarcity lead airlines to lease replacement engines or aircraft to maintain operations.
• Inventory & spare parts holding (+ USD 1.4 billion): Airlines are preemptively stocking more spares and parts to buffer against uncertainty, increasing capital tied up in inventory.

These cost pressures are compounded by a commercial aircraft backlog that in 2024 reached 17,000 units, well above the pre-COVID 2010–2019 average of ~13,000.  Slower production rates and constrained component throughput increase wait times and limit flexibility for airlines scaling capacity.

Impacts Across the Aerospace & Aviation Ecosystem

While the headline figures center on airlines, the ripple effects reach deeper into the aerospace supply chain:

• Constraints on OEMs & integrators: Slower parts throughput, tooling bottlenecks, and material shortages make it difficult for airframe and subsystem suppliers to meet delivery schedules or ramp production.
• MRO and aftermarket tension: Maintenance providers are squeezed by surging demand, longer turn times, and limited parts availability, which can degrade service levels and erode margins.
• Allocation and prioritization conflicts: Suppliers that serve both defense and commercial sectors may need to manage allocation pressure, making tough decisions about which contracts receive priority.
• Transparency and supply risk exposure: Many aerospace supply chains suffer from limited visibility beyond Tier-1 suppliers. Unexpected disruptions in lower tiers can cascade upward rapidly.

In this context, airlines and defense contractors alike are exposed to volatility and delays, particularly if chokepoints form at critical material, tooling, or manufacturing nodes.

Proposed Mitigation Strategies

The Oliver Wyman study presents a set of structural and operational recommendations aimed at restoring resilience:

1. Open up the aftermarket: Encourage policies and practices that allow airlines and independent MROs more access to parts, repair data, and alternative sourcing models (e.g. USM, PMA) rather than being locked into OEM repair networks.
2. Improve supply chain transparency: Develop systems to monitor and share data across multiple supplier tiers, enabling earlier detection of risk and bottlenecks.
3. Leverage predictive analytics & shared platform data: Use analytics and common maintenance data pools to optimize parts allocation, spare pooling, and anticipatory planning.
4. Expand repair and parts capacity: Accelerate certification of alternative repair sources, increase repair shop infrastructure, and embrace advanced manufacturing techniques to alleviate bottlenecks.

According to IATA, implementing these actions will require coordinated commitment across airlines, OEMs, MROs, regulators and supply chain partners.

Outlook & Risk Considerations

There is no quick fix to complex supply chain stress, but several factors will influence the trajectory:

• Pace of adoption: The ability of the industry to adopt new business models (e.g. aftermarket liberalization), shared data systems, and repair capacity expansion will be uneven among regions.
• Regulatory & certification impacts: Expanded use of alternative parts or repair pathways may require regulatory adjustments, certification harmonization, and oversight frameworks.
• Competition for scarce resources: Materials, skilled labor, and manufacturing capacity remain limited globally, especially with defense and other sectors competing for overlapping inputs.
• Demand volatility: Future demand shifts, either drops or surges, could amplify the effects of any supply chain misalignment.

For the aerospace and defense community, the report is a clear signal that supply chain resilience must become a strategic priority. The interdependence of OEMs, MROs, airlines, and component providers suggests that systemic coordination and investment will increasingly differentiate competitive positioning.