Global Aviation Supply Chain Issues Not a Reason For Pessimism: IATA

As the aviation industry grapples with supply chain failures,The International Air Transport Association (IATA) suggests enhanced supply chain visibility, opening up the aftermarket and unlocking the value of digitalization as the immediate measures to navigate challenges.

“Globally, the aircraft order backlog is over 18,000. And the average fleet age has reached a record 15.2 years. Moreover, being short over 5,000 more fuel-efficient replacement aircraft that airlines had counted on, means missed efficiency gains, not to mention higher lease rates and increased maintenance costs. In total, supply chain failures cost airlines at least $11 billion in 2025. Today’s higher fuel prices will only make that worse,” said Willie Walsh, IATA’s Director General in his report on the air transport industry.

Alongside aircraft delivery delays, engine durability issues, shortages of materials and spare parts, and constrained maintenance capacity are disrupting airline operations. 

Credit rating agency, ICRA, reports indicate that engine failures and global supply chain disruptions have severely limited capacity in the Indian aviation sector.

Civil Aviation Minister K Ram Mohan Naidu identified global supply chain disruptions as a major bottleneck for India’s aviation sector, with aircraft delivery backlogs stretching up to 15 years despite over 1,700 planes being on order. To mitigate these pressures, the government is accelerating indigenous manufacturing and Maintenance, Repair, and Overhaul (MRO) ecosystems 

In March 2026, ICRA revised its outlook on the Indian aviation industry to negative from stable owing to expected weakening of the revenue per available seat kilometre – cost per available seat kilometre (RASK-CASK) spread due to hardening of aviation turbine fuel (ATF) prices and disruptions in the availability of certain international airspaces starting February 28, 2026, following escalation of the geopolitical conflict in West Asia, coupled with continued depreciation of the INR against the USD.

ICRA’s forecasts (drawn prior to the initiation of the West Asian conflict) of 8-10 per cent for international air passenger traffic growth for Indian carriers and 6-8 per cent for domestic air passenger traffic for FY2027 now have a downward bias. Flight cancellations amid airspace closures and increase in air fares in view of the levy of fuel surcharge will weigh on passenger traffic growth. 

IATA encouraged more reliable information from manufacturers to airlines on delivery delays, repair turnaround times, parts availability, and known bottlenecks to enable airlines to better plan the operations of their global networks. It called for more manufacturers to commit to key principles included in the IATA-CFM agreement in support of greater aftermarket competition by reinforcing access to third-party MRO services, alternative parts, and approved repairs.

IATA called for better integration between airline maintenance systems and external market intelligence to improve inventory management, identify material availability and scarcity, support repair-or-replace decisions, and strengthen warranty claims. AI can further support these processes by predicting demand, identifying shortages, and reducing manual work.

“The supply chain is under real pressure, but this is not a reason for pessimism. It is a reason for action. We need to achieve the resilient aerospace supply chains that global connectivity needs,” said Stuart Fox, IATA’s Director, Flight and Technical Operations.