IATA expects airline supply chain woes to persist until 2025

 

The International Air Transport Association says the total backlog for new aircraft has reached a record high of 17,000 planes. (AP pic)

PETALING JAYA: 

The International Air Transport Association (IATA) has predicted severe supply chain issues to continue to impact airline performance into 2025.

In a statement, IATA said the estimate for 2024 deliveries is 1,254 aircraft, a 30% shortfall on what was predicted going into the year.

“In 2025, deliveries are forecast to rise to 1,802, well below earlier expectations for 2,293 deliveries with further downward revisions in 2025 widely seen as quite possible,” it said.

In November, The Edge reported that Malaysia Airlines Bhd’s parent company, Malaysian Aviation Group, received its first Airbus 330-900 (A33neo) – almost two months after it was initially scheduled to be delivered.

In August, it was reported that MAG was supposed to receive 17 new aircraft this year from manufacturers but only four – all Boeing 737-8 – had been delivered by the US company.

MAG managing director Izham Ismail said that Boeing was supposed to deliver 13 aircraft, while Airbus was to deliver four by the end of the year. He said MAG was now expecting delivery of only three planes from Airbus.

This issue had partly affected its operations and impacted their fleet planning.

Without specifically referring to MAG, IATA said that the total backlog for new aircraft deliveries has reached 17,000 planes, a record high.

“At present delivery rates, this would take 14 years to fulfil, double the six-year average backlog for the 2013-2019 period. However, the waiting time is expected to shorten as delivery rates increase,” it added.

IATA quoted its director-general, Willie Walsh, as saying that supply chain issues are frustrating every airline with a triple whammy on revenues, costs, and environmental performance.

“Load factors are at record highs and there is no doubt that if we had more aircraft they could be profitably deployed, so our revenues are being compromised.

“Manufacturers are letting down their airline customers and that is having a direct impact of slowing down airlines’ efforts to limit their carbon emissions,” he added.

Walsh also said that the ageing fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep flying. The average age of the global fleet has risen to a record 14.8 years, a significant increase from the 13.6 years average for 1990-2024.

He added that leasing rates have risen more than interest rates as competition among airlines intensified the scramble to find every way possible to expand capacity.

“This is a time when airlines need to be fixing their battered post-pandemic balance sheets, but progress is effectively capped by supply chain issues that manufacturers need to resolve,” he said. - FMT