Introduction
Oliver Wyman, a global leader in management consulting and a business of Marsh McLennan, has released a joint study with the International Air Transport Association (IATA) on the challenges within the commercial aircraft supply chain. The report, titled “Reviving the Commercial Aircraft Supply Chain,” examines the root causes of these challenges, their impact on airlines, and potential solutions to move the aviation industry forward.
Supply Chain Challenges
The aerospace industry is facing delays in production of new aircraft and parts, leading to airlines revising their fleet plans and keeping older, less efficient aircraft in service for longer periods of time. The global backlog of commercial aircraft reached a record high of over 17,000 in 2024, significantly higher than the annual backlog of around 13,000 from 2010 to 2019.
The slow production pace is estimated to cost the airline industry more than $11 billion in 2025, due to four main factors: excess fuel costs, additional maintenance costs, increased engine leasing costs, and surplus inventory holding costs. These costs are also hindering airlines from meeting the growing demand for air travel, with passenger demand outpacing capacity expansion in 2024 and continuing to rise in 2025.
Root Causes
The report identifies the current economic model of the aerospace industry, geopolitical instability, raw material shortages, and tight labor markets as the underlying causes of the supply chain challenges. To address these challenges, the report suggests key initiatives for OEMs, lessors, suppliers, and airlines to work together and build greater resilience in the supply chain.
Initiatives for the Aerospace Industry
The report recommends several actions for the aerospace industry to consider in order to improve supply chain performance and mitigate the impact on airlines. These include opening up aftermarket best practices, enhancing supply chain visibility, unlocking value from data, and expanding repair and parts capacity.
The first and most crucial step for industry participants to take is to develop a strategic approach among all stakeholders in the supply chain. Collaboration is key in addressing the multi-faceted challenges facing the industry and finding solutions to better meet production and maintenance demands.
Conclusion
According to IATA Director General Willie Walsh, the current supply chain challenges have resulted in unprecedented waits for aircraft, engines, and parts, leading to increased costs and limiting airlines’ ability to meet consumer demand. He emphasizes the need for collaboration and transparency in the supply chain to help ease bottlenecks and provide relief for airlines.
About Oliver Wyman and IATA
Oliver Wyman, a business of Marsh McLennan, is a management consulting firm that combines industry knowledge with specialized expertise to help clients optimize their business and accelerate performance. Marsh McLennan is a global leader in risk, strategy, and people, advising clients in 130 countries. IATA represents over 350 airlines and works towards making air transport safe, efficient, and sustainable.
For more information, please contact Danielle Arceneaux at [email protected] or +1 (