Airlines Brace for $11 Billion Supply Chain Shock in 2025, IATA Warns

Inside the $11Bn Supply Chain Storm

In October 2025, the International Air Transport Association (IATA), together with management consultants Oliver Wyman, published a sobering estimate: global airlines are poised to incur at least $11 billion in extra costs this year due to protracted supply chain disruptions.

Origins of the Crisis

The turbulence began years ago, but the cumulative effects have reached a breaking point. Delays in aircraft manufacturing, bottlenecks in parts delivery, and shortages of raw materials and skilled labor have strained the aerospace supply chain. Airlines, caught in the ripple effects, have had to adjust their operations, often relying more heavily on aging fleets and stockpiling critical spares.

Cost Drivers: Fuel, Maintenance, Engines, Spares

IATA’s breakdown reveals four key pressure points:

• $4.2 billion in excess fuel costs — forced by airlines to keep older, less efficient aircraft aloft as newer planes aren’t delivered on time
• $3.1 billion in maintenance overruns — aging aircraft demand more attention, and delays in parts delivery stretch repair timelines
• $2.6 billion in engine leasing costs — airlines must lease engines to replace those idled in lengthy maintenance queues
• $1.4 billion in spares inventory costs — to buffer against unpredictability, carriers are hoarding spare parts, driving up holding costs

Even halved, IATA argues, this figure would still represent a “massive drag” on an industry already working on razor-thin margins.

Systemic Risks & Industry Tensions

Beyond the numbers, IATA’s Director General Willie Walsh voiced surprise at the severity of the findings and raised concerns over possible anti-competitive behavior among suppliers. He questioned why engine manufacturers and parts suppliers are earning profit margins in the mid-twenties while airlines struggle with margins around 6.7%.

The backdrop to this financial barrage is not simply supply chain failure. The study points to structural rigidity in maintenance and parts ecosystems, consolidated control of aftermarket services, and opaque supplier practices—all of which limit airlines’ ability to respond flexibly.

What This Means Going Forward

According to Reuter’s report, The $11 billion warning is more than a one-year shock, it may signal a deeper recalibration in aerospace logistics and airline strategy. Airlines are being forced to operate with less margin for error: older aircraft remain in service longer, spare parts are stockpiled, and routes or frequencies may be cut to manage costs.

But the path ahead also holds opportunity. IATA’s report advocates for greater aftermarket access, improved supply chain transparency, shared maintenance data platforms, and alternative sourcing strategies—measures intended to break the chokehold of dominant suppliers and give airlines more agency.

If airlines, OEMs, and parts suppliers can convene around shared incentives, reduce structural bottlenecks, and open up competition in key segments, the 2025 cost shock might become the inflection point for a leaner, more resilient industry. Otherwise, the long tail of this crisis could stretch well beyond a single year.

In 2025, global airlines are forecast to face over $11 billion in additional costs stemming from prolonged aerospace supply chain disruptions, according to IATA. Major burdens include excess fuel, maintenance overruns, engine leasing, and spare parts stockpiling. The findings revive concerns over supplier power and push calls for greater aftermarket access and transparency.