Headlines
Airlines face $11 billion supply chain hit in 2025, IATA says
Published by Global Banking and Finance Review
Posted on October 13, 2025
3 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 13, 2025
3 min readLast updated: January 21, 2026
IATA reports airlines will incur $11 billion in supply chain costs by 2025, impacting fares and operations. The report calls for increased competition in the aerospace sector.
By Tim Hepher and Joanna Plucinska
PARIS/LONDON (Reuters) -Global airlines face more than $11 billion in extra costs from supply chain disruption this year, a leading industry group said on Monday, in a report likely to rekindle debate over competition in the $250-billion aerospace industry.
The study by the International Air Transport Association, produced with consultants Oliver Wyman, marks the first attempt to quantify the impact of a five-year supply chain crisis that has driven up fares and led to flight cancellations.
IATA Director General Willie Walsh said he was surprised by the extent of the findings and told Reuters there may be grounds to revisit whether airlines are being subjected to anti-competitive practices by suppliers, after dropping a previous complaint in 2018.
"Even if you halve the number, it's still a massive drag on the industry," Walsh said in an interview.
REPORT DETAILS COST OF BOTTLENECKS
Researchers found the largest impact stems from $4.2 billion in extra fuel as airlines keep older planes in service.
Additional maintenance is expected to cost $3.1 billion, while leasing engines to replace those stuck in queues for maintenance adds another $2.6 billion.
Holding more spare parts to cushion delays is projected to cost airlines $1.4 billion.
Planemakers and their suppliers have waded through a mire of setbacks, from shortages of labour, materials and parts to mounting delays at repair shops, particularly for engines.
There is also a growing tug of war with the defence industry for capacity as governments increase military spending.
"There's now going to be continuing competition for the limited supply that is there," Walsh said, adding that supply chains would be an issue for the rest of the decade.
He questioned the influence suppliers exert over parts pricing and called for “additional competition in the aftermarket, which clearly has seen significant consolidation.”
PROFIT GAP
IATA has previously called for greater competition in maintenance, including improved access to independent parts known as PMA.
In 2016, it filed a complaint with the European Union against CFM International but withdrew it two years later after the engine maker agreed to maintain an open and competitive market.
A similar agreement was reached with Rolls-Royce in 2021.
Walsh said there were no plans to launch any new challenge, but did not rule it out.
"We have been evaluating it, but we'd have to do a lot more work," he said, noting that airlines have confidential agreements, so digging deeper involves teams of lawyers.
"It's a complex piece of work, but I think there could be merit in us looking at that again."
He pointed to the gap between airline operating margins, forecast at 6.7% this year, and margins of some engine makers and suppliers in the mid-20s as a source of concern.
"How is it that they can make such massive margins from an industry that makes margins that are wafer-thin? It just doesn't add up," Walsh said.
Engine makers argue they are entitled to adequate returns given the risks involved in developing new technologies and offering insurance-style contracts to cover repair costs.
Airlines are expected to spend $120 billion on repair and maintenance this year, rising to $150 billion by 2030, IATA said.
Walsh softened his tone towards Airbus and Boeing, saying they were becoming more transparent about jet delays. In June, he accused planemakers of "failing badly".
(Reporting by Tim Hepher, Editing by Louise Heavens)
Supply chain disruption refers to interruptions in the flow of goods and services, which can lead to delays, increased costs, and operational challenges for businesses, particularly in industries like aviation.
Operating margins measure a company's operational efficiency, calculated as operating income divided by revenue. It indicates how much profit a company makes on each dollar of sales.
Anti-competitive practices are actions by companies that reduce competition in the market, such as price fixing or monopolistic behavior, which can harm consumers and other businesses.
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