Supply chain difficulties in the global aviation industry will improve but continue for much of the decade, leaving airlines to deal with disruptive and costly fleet planning challenges for years to come, a report by business advisory giant PwC has found.
Aircraft deliveries will increase significantly this year with the largest rebound coming from Boeing, despite the US manufacturer’s troubles, according to PwC’s 2025 Aviation Industry Review & Outlook, written by Dick Forsberg, senior aviation finance consultant for PwC Ireland.
But a shortfall in aircraft deliveries will continue, it said. Aircraft deliveries were 20 per cent below expectations in 2024, as promised aircraft were rendered unavailable as a result of engines that were unserviceable or components that were unreliable.
Adding to the airlines’ cost burden, the average age of the global commercial fleet has trended up for the past five years to hit 14.8 years in 2024, PwC said. This is the highest on record and well above the 13.6 year long-term average.
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There is now a shortfall of more than 4,500 commercial aircraft, according to the report. Delivery commitments for an estimated 560 aircraft missed in 2024 alone, leaving airlines short of capacity for years to come.
The number of firm orders booked by airlines also fell sharply in 2024 after reaching a record-breaking total in 2023.
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The capacity shortages meant that virtually all remaining flyable aircraft on lessors’ books were placed on lease in 2024.
“The aircraft leasing sector has been a net beneficiary of the capacity issues and improving underlying demand in aviation. However, the shortfall and backlog of aircraft deliveries may also limit lessors’ growth strategies over the medium and longer term and other avenues for expansion may need to be considered,” said PwC Ireland aviation finance leader Brian Leonard.
Globally, the $1.5 trillion (€1.45 trillion) airline industry operates more than 30,000 aircraft, carrying almost 5 billion passengers a year and transporting 30 per cent of world trade by value.
While net profitability for airlines in 2024 was ahead of industry forecasts at the start of the year, it was still 10 per cent behind 2023 levels, with the return on capital lagging the cost of investment.
”The industry in 2025 will benefit from a robust global economy, lower oil prices, further modest reductions in interest rates and inflation and the completion of post-Covid traffic recovery in Asia,” said Mr Forsberg.
“Supply chains continue to present challenges but should gradually improve.“
Despite the challenges endured by airlines, they carried more passenger and cargo traffic at higher average load factors in 2024 compared to 2023, and both operating and net profitability were well ahead of predictions.
“These are good reasons for optimism heading into 2025 and beyond,” Mr Forsberg said.
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