Aviation Industry Faces Supply Chain Turbulence Amid Rising Costs

The aviation industry is grappling with supply chain disruptions, as highlighted by IATA chief Willie Walsh. He voiced concerns over OEMs planning price hikes amid ongoing frustrations with delivery delays. Aviation's financial strain is compounded by tariffs impacting supply recovery and non-fuel costs, threatening the industry's sustainability and growth.

Amid ongoing supply chain disruptions, IATA chief Willie Walsh highlighted concerns about proposed price hikes by Original Equipment Manufacturers (OEMs). Speaking at the 69th Assembly of Presidents of the Association of Asia Pacific Airlines, Walsh emphasized the financial strain on airlines due to high OEM margins.

Walsh pointed out the imbalance in profit margins between airlines and OEMs, even as engine manufacturers report improved financial performance during a time of systemic disruption. He urged for fair returns for airlines and demanded better service from critical suppliers.

The aviation sector continues to face challenges with a backlog of over 17,000 aircraft and supply chain costs projected to exceed USD 11 billion by 2025. Tariffs further undermine supply recovery, affecting both supply and demand in an industry already burdened by increased non-fuel costs and sustainability issues.

(With inputs from agencies.)