Airlines Keep Older Jets as Aircraft Output Lags Demand

Aviation supply chain constraints have evolved from a temporary post-pandemic disruption into a structural bottleneck for the global airline industry, as passenger demand surpasses pre-COVID levels while aircraft production struggles to keep pace. Industry executives speaking at the Singapore Airshow said prolonged component shortages, extended lead times and material constraints are forcing carriers to retain aging aircraft longer than planned, increasing operating costs and complicating fleet strategies.

Although air traffic has fully recovered and continues to expand, aerospace manufacturing capacity has not fully normalized. Aircraft deliveries from Airbus and Boeing remain below original schedules as engine makers and tier-one suppliers balance limited output between new aircraft production and the growing maintenance requirements of in-service fleets. The result is a slower-than-expected fleet renewal cycle, delaying fuel-efficiency gains and adding pressure to airline balance sheets.

Jeffrey Lam, COO and president of commercial aerospace, ST Engineering, described the situation as systemic rather than cyclical. “Prolonged supply delays and bottlenecks appear to have become the new norm,” Lam said, warning that persistent constraints are undermining operational planning. ST Engineering, one of the world’s largest maintenance, repair and overhaul providers, has seen rising demand as airlines extend aircraft service lives.

To protect reliability, airlines are increasing contingency spending. Leslie Thng, CEO, Scoot, the low-cost subsidiary of Singapore Airlines, said carriers are investing in additional spare engines and inventory buffers. “We proactively secure more spare engines at our own expense to mitigate potential disruptions,” Thng said. Such defensive measures improve resilience but increase leasing, storage and capital costs.

The financial implications are significant. According to the International Air Transport Association (IATA), global passenger demand in 2025 was 9.3% higher than in 2019 and is expected to grow another 4.9% in 2026. To accommodate demand, airlines are operating aircraft roughly two years longer than historical averages. IATA estimates that the extended use of older aircraft increased fuel, maintenance, engine leasing and parts inventory costs by approximately US$11 billion in 2025 alone.

Engine manufacturers report steady production improvements but acknowledge that demand projections have been repeatedly revised upward. Gaël Méheust, CEO, CFM International, said production rose 25% in 2025 and is expected to increase by at least 10% annually in the coming years. However, he noted that the imbalance stems from demand exceeding earlier expectations rather than an outright failure to scale production. “It is not that the supply chain cannot ramp up — it’s that demand has reached levels we had not anticipated,” he said.

Material shortages continue to weigh on output. ST Engineering noted that while manufacturing an engine nacelle requires about six weeks, total lead times for certain components now approach 12 months, compared with roughly nine months before the pandemic. Early procurement offers limited protection when shortages are global.

Geopolitical  tensions have intensified supply challenges. Paul Wingfield of Future Metals said the war in Ukraine disrupted titanium supply chains, as Russia previously accounted for roughly half of global titanium exports. Lead times for titanium and nickel tubing currently range between 50 and 60 weeks — significantly longer than the pre-pandemic average of about 20 weeks. Although modestly improved from last year, these timelines remain structurally elevated.

Persistent shortages are also reshaping supplier dynamics. Feng Haotian of Shandong Stopart Brake Material said international sales of carbon brake discs doubled last year as airlines and maintenance providers sought alternatives to traditional Western suppliers. “Some customers now have little choice but to diversify sourcing,” he said, reflecting broader shifts in procurement strategy.

Aircraft delivery performance remains uneven. In 2025, Airbus delivered 793 aircraft after revising its annual target downward late in the year, while Boeing delivered 600 aircraft, its strongest performance in seven years following earlier production setbacks and regulatory scrutiny. Nevertheless, order backlogs remain substantial. The global passenger aircraft backlog stands at approximately 12 years at current production rates, with Airbus’ installed fleet about 16% larger than Boeing’s and its backlog roughly 35% higher.

Although backlog duration has eased from earlier peaks, order intake continues to exceed deliveries, prolonging pressure on manufacturers and limiting near-term fleet replacement options for airlines.

Looking ahead, industry leaders expect supply chain constraints to remain a defining feature of the operating environment. IATA Director General Willie Walsh warned at the Changi Aviation Summit that delivery delays and higher environmental compliance costs will continue to shape airline economics in 2026.