Persistent Supply Chain Challenges, Strong Passenger Demand Reshape Global Airline Industry

(MENAFN- Gulf Times)

Beyond the Tarmac

The global airline industry continues to grapple with persistent supply chain disruptions, leading to increased costs, delays in fleet expansion, and operational inefficiencies.
The sector relies heavily on highly intricate global supply chains for critical components such as engines, avionics, and landing gear. Already, disruptions in these supply chains have significantly impacted aircraft deliveries, particularly from the industry's leading manufacturers-Boeing and Airbus.
Ongoing bottlenecks in raw materials and essential components have extended aircraft production timelines, affecting airlines' fleet expansion and renewal strategies.
Carriers engaged in cargo transportation are also facing capacity constraints and delivery delays, further complicating global trade logistics.
In addition, airlines require a steady supply of spare parts to maintain operational efficiency. Supply chain disruptions have led to prolonged maintenance cycles, keeping aircraft grounded longer than expected.
The limited availability of spare parts has forced many airlines to explore alternative suppliers, often at a premium cost, industry analysts point out.
Disruptions in the supply chain have also affected fuel availability and distribution, contributing to fuel price volatility-one of the most significant cost factors for airlines. These challenges have placed further strain on operational budgets, compelling carriers to refine cost management strategies.
Despite these challenges, airlines-particularly those in the Asia-Pacific region-are experiencing robust demand for air travel, driven by strong passenger traffic in key markets such as China and India.
According to the International Air Transport Association (IATA), total demand, measured in revenue passenger kilometers (RPK), was up 10% in January compared to the same month in 2024. Total capacity, measured in available seat kilometers (ASK), was up 7.1% year-on-year.
The January load factor was 82.1% (+2.2 ppt compared to January 2024), an all-time high for that month.
International demand rose 12.4% compared to January 2024. Capacity was up 8.7% year-on-year, and the load factor was 82.6% (+2.7 ppt compared to January 2024), an all-time high for January.
Domestic demand rose 6.1% compared to January 2024. Capacity was up 4.5% year-on-year. The load factor was 81.2% (+1.2 ppt compared to January 2024), an all-time high for January.
“We have seen a notable acceleration in demand this January, with a particularly strong performance by carriers based in the Asia-Pacific region. The record high load factors that accompany this strong demand are yet another reminder of the persistent supply chain issues in the aerospace sector,” said Willie Walsh, IATA's Director General.
“The strong growth in demand aligns with the results of our latest passenger survey (November 2024 ) in which 94% of travellers indicted that they planned to travel as much or more in the coming 12 months than they did in the past year.
“Airlines are doing a good job of accommodating growing demand amid fleet and infrastructure constraints with satisfaction levels above 95%, and nearly 80% of travellers agreeing that air travel is good value for money.
“Choice is an important component of this satisfaction. Some 70% prefer to pay the lowest fare and customise the additional services they need. It is important for regulators to clearly understand that the majority of travellers do not want to pay automatically for services they don't need,” Walsh noted.
Industry experts stress that persistent supply chain disruptions continue to affect aircraft manufacturing, maintenance, and overall airline profitability.
To mitigate these challenges, airlines need to diversify their supplier base, enhance inventory management, and adopt more flexible operational strategies to ensure resilience in an evolving aviation landscape.

MENAFN19032025000067011011ID1109334015