Aircraft Delivery Delays Expected to Continue Into 2025: IATA

The International Air Transport Association (IATA) has announced that supply chain disruptions within the aviation industry are expected to persist through 2025, affecting aircraft deliveries.

For 2024, IATA now forecasts the delivery of only 1,254 aircraft, a 30% reduction from initial projections. These delays are attributed to ongoing supply chain issues impacting both manufacturers and suppliers. The delivery forecast for 2025 has also been revised down to 1,802 aircraft, compared to the earlier estimate of 2,293. This delay is contributing to an aging fleet, rising leasing costs, and higher maintenance expenses.

As a result of these delays, the global fleet’s average age is expected to reach 14.8 years in 2024, up from 13.6 years between 1990 and 2024. Older aircraft require more maintenance and consume more fuel, which further slows progress on fuel efficiency improvements. In 2024, fuel efficiency is expected to rise by only 0.1%, a significant drop from the historical annual improvements of 1.5% to 2.0% seen from 1990 to 2019. If fuel efficiency had followed the typical rate, airlines could have saved 1.4 billion gallons of fuel and cut CO2 emissions by 13.6 million metric tons.

One major concern is the backlog of 17,000 aircraft orders in 2024, the highest on record. At the current delivery rate, it would take around 14 years to clear this backlog—double the typical six-year period observed between 2013 and 2019. However, as delivery rates improve, the backlog is expected to decrease.

Moreover, the supply chain challenges have spurred demand for used aircraft, pushing lease rates for narrow-body planes up by 20% to 30% since 2019. These increased leasing costs, combined with rising interest rates, have led to higher financing expenses for airlines. This has put pressure on profit margins, and a decline in ticket revenues has further impacted industry profitability. In 2024, IATA predicts net profits will reach US$31.5 billion, a 10% decrease compared to 2023.

“We anticipate global airline profits of US$36.6 billion in 2025, despite ongoing challenges such as supply chain disruptions, rising taxes, and high costs. While industry revenues are projected to exceed $1 trillion, airlines will only maintain a slim 3.6% profit margin, earning just US$7 per passenger”, said IATA’s Director General Willie Walsh.

IATA also estimates that if leasing rates, interest rates, and maintenance costs had remained stable, and if fuel efficiency had improved as expected, net profits for 2024 could have been US$7.5 billion higher, potentially offsetting the decline in profitability.