Aircraft Supply Crisis: Tripple Whammy On Revenue, Costs, Performance

With aircraft production delays stretching into the next decade and maintenance backlogs worsening, airlines are being forced to rethink their expansion plans. Nigerian carriers are already reeling under many issues that threaten their existence. This additional global issue has taken a huge toll on them, compounding aircraft in their feet to an abysmal level, fuelled by an under-capacity problem, writes WOLE SHADARE

 

Struggle to keep pace

Aircraft manufacturers struggle to keep up with demand, with production backlogs stretching into the next decade. Airlines that had planned for rapid expansion post-pandemic are now being forced to adjust their fleet strategies, delay route launches, and explore alternative ways to maintain capacity.

As the industry grapples with labour shortages, material supply issues, and production inefficiencies, how long will these challenges persist, and what are airlines doing to mitigate them? Airlines are indeed facing a severe supply chain crisis, which is expected to persist into 2026.

This crisis is impacting aircraft deliveries, raising costs, and potentially limiting growth within the industry. Nigerian airlines are not immune to the problems. The problem is more pronounced with African airlines and especially Nigeria, which, although it has a robust aviation market but is currently hit by a dearth of aircraft with a lack of capacity to meet growing demand.

Chairman of United Airlines, Prof. Obiora Okonkwo, while briefing the media last Friday admitted the problem, saying it is extremely difficult for airlines to acquire airplanes because of the delay for the big airlines in Europe to acquire aircraft because many crises associated with aircraft delivery by Boeing and Airbus, not to talk of Nigeria that is finding it tough to lease airplanes.

Aircraft production delays have emerged as one of the most pressing issues for airlines worldwide. Narrow-body aircraft, crucial for short- and medium-haul routes, now have backlogs nearing 10 years, meaning that orders placed today will not be fulfilled until the 2030s.

Boeing’s production lines have been hit particularly hard, with the manufacturer still recovering from months-long strikes and a $21 billion capital raise to stabilise operations.

Meanwhile, Airbus faces its own struggles, trying to ramp up production while dealing with supply chain disruptions affecting critical aircraft components.

Engine supply issues, particularly with the Pratt & Whitney Geared Turbofan (GTF) engines, have exacerbated the crisis. More than 600 aircraft remain grounded due to durability concerns, forcing airlines to pull planes from service for extended maintenance periods.

This unexpected bottleneck has left carriers scrambling to rework schedules and seek alternative capacity solutions, but with aircraft deliveries delayed and spare parts in short supply, options are limited.

Many of Nigerian airlines have returned their leased aircraft; a situation that further exposes their struggle to meet up with schedules.

Nigerian airlines are truly overwhelmed but that should not be excuse for poor service delivery that many travellers are daily subjected to at most of the airports across the country.

Keeping planes in the air

The Nigerian Civil Aviation Authority (NCAA) understands the predicaments faced by the country’s airlines and recently advised Air Peace to cut down its schedules because of depletion of aircraft in its fleet.

The airline’s five Embraer 195-E2 aircraft acquired less than four years ago are said to be grounded because of engine flaws from the manufacturer. Many aircraft belonging to the airline are said to have been ferried overseas and have no date of return to service.

This is not limited to Air Peace alone. Virtually all the airlines are bleeding but experts said that must not be an excuse for shoddy service delivery.

The maintenance, repair, and overhaul (MRO) sector faces its own challenges, further compounding the airline industry’s woes.

Airlines that would normally phase out older aircraft and replace them with new deliveries are now forced to extend the lifespan of their fleets, increasing the demand for maintenance services.

However, MRO providers are dealing with severe labour shortages, with skilled technicians in short supply. Generally, the crisis is contributing to an increase in the average age of the global fleet, reaching 14.8 years, a notable rise from the 1990- 2024 average of 13.6 years.

The International Air Transport Association (IATA) is equally worried about the impact this is having on the global aviation industry. The clearing house for more than 300 global airlines said aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018, adding that the estimate for 2024 deliveries is 1,254 aircraft; a 30% shortfall on what was predicted going into the year.

IATA’s concerns

According to IATA, 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.

The backlog (cumulative number of unfulfilled orders) for new aircraft has reached 17,000 planes, a record high. At present delivery rates, this would take 14 years to fulfill, double the six-year average backlog for the 2013-2019 period. However, the waiting time is expected to shorten as delivery rates increase.

The number of “parked” aircraft is 14 per cent (approximately 5,000 aircraft) of the total fleet (35,166 as at December 2024, including Russian-built aircraft). While this has improved recently, parked aircraft remain 4 percentage points higher than pre-pandemic levels (equivalent to some 1,600 aircraft).

Of these, 700 (2% of the global fleet) are parked for engine inspections. We expect this situation to persist into 2025.

The Director-General of IATA, Willie Walsh admitted that supply chain issues are frustrating every airline with a triple whammy on revenues, costs, and environmental performance, adding that load factors are at record highs and there is no doubt that if airlines had more aircraft they could be profitably deployed, with airlines’ revenues being compromised.

“Meanwhile, the aging fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep it flying. And, on top of this, 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,” said Walsh.

Specifically, IATA noted that, persistent supply chain issues at least partially responsible for two negative developments such as fuel efficiency (excluding the impact of load factors) was unchanged between 2023 and 2024 at 0.23 litres/100 available tonne kilometers (ATK)

This, according to it, is a step back from the long-term (1990-2019) trend of annual fuel efficiency improvements in the range of 1.5-2.0 per cent, just as exceptional demand for leased aircraft pushed leasing rates for narrow-body aircraft to levels 20-30% higher than in 2019.

The IATA DG stated that the entire aviation sector is united in its commitment to achieving netzero carbon emissions by 2050. But when it comes to the practicality of actually getting there, airlines are left bearing the biggest burden. “The supply chain issues are a case in point.

Manufacturers are letting down their airline customers and that is having a direct impact of slowing down airlines’ efforts to limit their carbon emissions. If the aircraft and engine manufacturers could sort out their issues and keep their promises, we’d have a more fuel-efficient fleet in the air,” he said.

Last line

The aviation supply chain crisis is not expected to ease significantly in the near term. The Alton Aviation Consultancy report suggests that aircraft production backlogs will persist through at least 2027- 2028, with long-term normalisation likely taking the remainder of the decade.

While manufacturers are working to ramp up production and diversify their supplier bases, ongoing geo-political tensions, material shortages, and financing challenges will continue to pose risks.

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