Global airlines are heading into 2025 weighed down by an estimated $11 billion in additional expenses as the world’s aviation supply chain continues to buckle under the strain of persistent production delays, maintenance bottlenecks, and component shortages. What was once dismissed as a temporary post-pandemic recovery issue has now evolved into a deep-rooted structural crisis, forcing airlines to make costly compromises—operating older jets, leasing engines at inflated rates, and stockpiling parts to prevent grounding. The mounting disruptions have exposed the fragility of the aviation ecosystem and are threatening to reshape the industry’s financial and operational model for years to come.
Older Fleets Drive Soaring Fuel and Maintenance Costs
The biggest portion of this $11 billion blow comes from the soaring cost of keeping older aircraft in service longer than planned. Airlines across major markets have had to delay their fleet renewal schedules as aircraft manufacturers struggle to meet delivery targets due to shortages of skilled labor, materials, and key components. Each year of delay forces airlines to operate jets that consume up to 15 percent more fuel than the next-generation models they were supposed to replace. According to analysts, this alone translates into roughly $4.2 billion in additional fuel costs, as global oil markets remain unpredictable and sustainable aviation fuel (SAF) adoption remains slow and expensive.
Older aircraft are not only less fuel-efficient but also require more frequent and costly maintenance. Many maintenance and overhaul facilities are working at full capacity, with engine repair queues stretching for months. Airlines waiting for repairs are forced to lease engines to keep aircraft operational, and these short-term leasing contracts have become a massive financial burden. The combined pressure of engine shortages and repair delays is expected to cost the sector $5.7 billion this year—$3.1 billion in maintenance and another $2.6 billion in leasing fees.
With repair and manufacturing delays continuing, airlines have turned to stockpiling spare parts as a form of insurance against unexpected mechanical failures. This shift represents a significant change from the pre-pandemic “just-in-time” logistics model that kept inventories lean and costs low. Airlines are now maintaining warehouses of extra parts and components, adding an estimated $1.4 billion in inventory holding costs across the industry.
While this approach helps reduce the risk of flight cancellations, it ties up working capital and creates inefficiencies that ripple through airline balance sheets. In some cases, spare parts are being sourced through secondary markets at premium prices, while others are sitting idle as delivery schedules shift. Executives acknowledge that this defensive strategy, while necessary in the short term, adds long-term financial stress to an already stretched industry.
Structural Cracks in the Aerospace Supply Chain
Behind these numbers lies a deeper problem: the aviation supply chain itself is struggling to recover from years of accumulated stress. Aircraft and engine makers are still working through massive backlogs, with more than 17,000 aircraft awaiting delivery globally. Many of the specialized suppliers that feed into this ecosystem—producing avionics, composites, and critical engine components—remain constrained by limited manufacturing capacity and a shortage of qualified workers.
Adding to the complexity, the defense sector has become a major competitor for the same pool of resources. As governments worldwide boost military spending, engine parts, metals, and engineering talent are being redirected from commercial aviation toward defense contracts. This tug of war is worsening delivery delays and inflating costs across the supply chain. Analysts expect these conditions to persist well into the second half of the decade, meaning that 2025’s $11 billion shock may represent just one phase of a longer, more entrenched cost escalation cycle.
The imbalance of profitability across the aviation value chain has become another flashpoint. While global airlines are forecast to post operating margins of around 6–7 percent, some major suppliers and engine manufacturers continue to report margins exceeding 20 percent. Industry leaders argue that the consolidation of suppliers in the maintenance and parts market has eroded competition, giving dominant players greater pricing power over airlines that have few alternatives.
Airlines have long pushed for fairer access to independent maintenance, repair, and overhaul (MRO) providers and for the broader adoption of alternative, independently produced parts known as PMA (Parts Manufacturer Approval). However, regulatory and contractual barriers remain high. The current supply chain turmoil has reignited calls for antitrust scrutiny and greater oversight to ensure suppliers are not exploiting scarcity to inflate prices.
Rethinking Fleet Strategy, Routes, and Pricing
The financial strain of the supply crisis is forcing airlines to rethink how they operate. Many carriers are deferring aircraft orders or renegotiating delivery timelines to align with available capacity, while others are extending existing leases instead of taking on new aircraft. Network planning is also being reshaped: airlines are prioritizing high-yield routes and reducing frequencies on marginal ones to conserve operational resources.
Passengers are beginning to feel the ripple effect as well. The cost pressures are pushing airlines to raise ticket prices to offset rising expenses, particularly on international and long-haul routes. Analysts warn that fare increases could become a permanent feature of global aviation, as carriers struggle to recover lost margins without sacrificing service quality.
The aircraft leasing market, meanwhile, has emerged as a major beneficiary. With airlines unable to secure new planes on time, leasing firms are commanding record rates and wielding unprecedented influence over global fleet composition. More than half of the world’s commercial aircraft are now leased rather than owned—an all-time high that underscores the scale of airlines’ dependency on third-party financing.
Industry’s Search for Solutions
In response to the crisis, airlines, manufacturers, and regulators are exploring multiple avenues to restore balance to the system. Increasing supply chain transparency through digital tracking tools could help identify bottlenecks earlier and coordinate responses. Investment in predictive maintenance and AI-based diagnostics is also accelerating, allowing carriers to forecast component failures and manage repairs more efficiently.
Some governments are considering incentives to expand MRO capacity and diversify component sourcing beyond a handful of major suppliers. Collaborative approaches between civil and defense sectors are being discussed to ease material competition and stabilize production cycles. Still, most experts agree that these remedies will take time to bear fruit, meaning the sector will continue to operate under financial strain for at least several more years.
The projected $11 billion supply chain hit is not just an accounting figure—it marks a turning point for global aviation. Airlines that once relied on predictable manufacturing and maintenance ecosystems now face an era defined by scarcity, rising costs, and structural imbalance. The industry’s traditional efficiency model, built on speed and precision, is giving way to one driven by resilience and redundancy.
As 2025 unfolds, the question for airlines is no longer whether the crisis will end soon, but how they can adapt to it. Those able to innovate, diversify supply lines, and harness technology may find stability. Others will be forced to consolidate or shrink. What’s clear is that the age of effortless supply in aviation is over—and the cost of keeping planes in the sky has never been higher.
(Source:www.businesswire.com)
Older Fleets Drive Soaring Fuel and Maintenance Costs
The biggest portion of this $11 billion blow comes from the soaring cost of keeping older aircraft in service longer than planned. Airlines across major markets have had to delay their fleet renewal schedules as aircraft manufacturers struggle to meet delivery targets due to shortages of skilled labor, materials, and key components. Each year of delay forces airlines to operate jets that consume up to 15 percent more fuel than the next-generation models they were supposed to replace. According to analysts, this alone translates into roughly $4.2 billion in additional fuel costs, as global oil markets remain unpredictable and sustainable aviation fuel (SAF) adoption remains slow and expensive.
Older aircraft are not only less fuel-efficient but also require more frequent and costly maintenance. Many maintenance and overhaul facilities are working at full capacity, with engine repair queues stretching for months. Airlines waiting for repairs are forced to lease engines to keep aircraft operational, and these short-term leasing contracts have become a massive financial burden. The combined pressure of engine shortages and repair delays is expected to cost the sector $5.7 billion this year—$3.1 billion in maintenance and another $2.6 billion in leasing fees.
With repair and manufacturing delays continuing, airlines have turned to stockpiling spare parts as a form of insurance against unexpected mechanical failures. This shift represents a significant change from the pre-pandemic “just-in-time” logistics model that kept inventories lean and costs low. Airlines are now maintaining warehouses of extra parts and components, adding an estimated $1.4 billion in inventory holding costs across the industry.
While this approach helps reduce the risk of flight cancellations, it ties up working capital and creates inefficiencies that ripple through airline balance sheets. In some cases, spare parts are being sourced through secondary markets at premium prices, while others are sitting idle as delivery schedules shift. Executives acknowledge that this defensive strategy, while necessary in the short term, adds long-term financial stress to an already stretched industry.
Structural Cracks in the Aerospace Supply Chain
Behind these numbers lies a deeper problem: the aviation supply chain itself is struggling to recover from years of accumulated stress. Aircraft and engine makers are still working through massive backlogs, with more than 17,000 aircraft awaiting delivery globally. Many of the specialized suppliers that feed into this ecosystem—producing avionics, composites, and critical engine components—remain constrained by limited manufacturing capacity and a shortage of qualified workers.
Adding to the complexity, the defense sector has become a major competitor for the same pool of resources. As governments worldwide boost military spending, engine parts, metals, and engineering talent are being redirected from commercial aviation toward defense contracts. This tug of war is worsening delivery delays and inflating costs across the supply chain. Analysts expect these conditions to persist well into the second half of the decade, meaning that 2025’s $11 billion shock may represent just one phase of a longer, more entrenched cost escalation cycle.
The imbalance of profitability across the aviation value chain has become another flashpoint. While global airlines are forecast to post operating margins of around 6–7 percent, some major suppliers and engine manufacturers continue to report margins exceeding 20 percent. Industry leaders argue that the consolidation of suppliers in the maintenance and parts market has eroded competition, giving dominant players greater pricing power over airlines that have few alternatives.
Airlines have long pushed for fairer access to independent maintenance, repair, and overhaul (MRO) providers and for the broader adoption of alternative, independently produced parts known as PMA (Parts Manufacturer Approval). However, regulatory and contractual barriers remain high. The current supply chain turmoil has reignited calls for antitrust scrutiny and greater oversight to ensure suppliers are not exploiting scarcity to inflate prices.
Rethinking Fleet Strategy, Routes, and Pricing
The financial strain of the supply crisis is forcing airlines to rethink how they operate. Many carriers are deferring aircraft orders or renegotiating delivery timelines to align with available capacity, while others are extending existing leases instead of taking on new aircraft. Network planning is also being reshaped: airlines are prioritizing high-yield routes and reducing frequencies on marginal ones to conserve operational resources.
Passengers are beginning to feel the ripple effect as well. The cost pressures are pushing airlines to raise ticket prices to offset rising expenses, particularly on international and long-haul routes. Analysts warn that fare increases could become a permanent feature of global aviation, as carriers struggle to recover lost margins without sacrificing service quality.
The aircraft leasing market, meanwhile, has emerged as a major beneficiary. With airlines unable to secure new planes on time, leasing firms are commanding record rates and wielding unprecedented influence over global fleet composition. More than half of the world’s commercial aircraft are now leased rather than owned—an all-time high that underscores the scale of airlines’ dependency on third-party financing.
Industry’s Search for Solutions
In response to the crisis, airlines, manufacturers, and regulators are exploring multiple avenues to restore balance to the system. Increasing supply chain transparency through digital tracking tools could help identify bottlenecks earlier and coordinate responses. Investment in predictive maintenance and AI-based diagnostics is also accelerating, allowing carriers to forecast component failures and manage repairs more efficiently.
Some governments are considering incentives to expand MRO capacity and diversify component sourcing beyond a handful of major suppliers. Collaborative approaches between civil and defense sectors are being discussed to ease material competition and stabilize production cycles. Still, most experts agree that these remedies will take time to bear fruit, meaning the sector will continue to operate under financial strain for at least several more years.
The projected $11 billion supply chain hit is not just an accounting figure—it marks a turning point for global aviation. Airlines that once relied on predictable manufacturing and maintenance ecosystems now face an era defined by scarcity, rising costs, and structural imbalance. The industry’s traditional efficiency model, built on speed and precision, is giving way to one driven by resilience and redundancy.
As 2025 unfolds, the question for airlines is no longer whether the crisis will end soon, but how they can adapt to it. Those able to innovate, diversify supply lines, and harness technology may find stability. Others will be forced to consolidate or shrink. What’s clear is that the age of effortless supply in aviation is over—and the cost of keeping planes in the sky has never been higher.
(Source:www.businesswire.com)
