The global airline industry is currently grappling with significant challenges due to massive delivery backlogs at major aircraft manufacturers like Boeing and Airbus. These backlogs are having ripple effects across airline operations, financial planning, and growth strategies around the world.In 2025, deliveries are forecast to rise to 1,802, having been revised down from 2,293, and further cuts to this number are to be expected, according to the International Air Transport Association (IATA).The backlog (the cumulative number of unfulfilled orders) of new aircraft has reached 17,000 planes this year, a record high for the industry, IATA noted at its Annual General Meeting in New Delhi in June.At present delivery rates, it would take 14 years to clear the backlog, double the six-year average for the 2013-2019 period. In other words, the delivery backlog of 17,000 implies a 14-year wait between ordering and delivery.The number of deliveries scheduled for 2025 is 26% less than what was promised a year-ago. However, the waiting time is expected to shorten as delivery rates increase.IATA data reveal that over 1,100 aircraft under 10 years of age are in storage. That’s 3.8% of the entire fleet, nearly three times the pre-pandemic comparison of 1.3%.And the annual fleet replacement rate of 3% is well below the normal 5-6%.Aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018. The estimate for deliveries in 2024 is 1,254 aircraft, 30% fewer than what was predicted at the start of the year.As a result of delayed deliveries, 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 the period 1990-2024.An older fleet translates into higher maintenance costs and higher fuel burn. Therefore, existing supply chain issues are at least partially responsible for the deceleration in fuel efficiency gain – in 2024 fuel efficiency (measured in litres per Available Tonne-Kilometres – ATK) was broadly unchanged (declining a mere 0.1% y-o-y), which is a most regrettable departure from the long-term (1990-2019) trend of annual fuel efficiency improvements in the range of 1.5-2.0%.Had efficiency improvements continued in 2024 at 1.5%, the industry would have burnt 1.4bn gallons less jet fuel and CO2 emissions would have been 13.6mn tons lower, all things being equal.The supply chain issues have also boosted demand for used aircraft, leading to an increase of 20-30% in lease rates of narrow-body aircraft compared with 2019. This, together with higher interest rates, has impacted airlines’ financing costs and bottom lines. Including the contraction in ticket yields, these factors have contributed to limiting the industry-wide net profit in 2024 to $31.5bn (down 10% y-o-y from 2023).IATA estimates that if lease prices, interest rates, and unit maintenance costs had been unchanged compared with 2023, and if fuel efficiency had continued its downward trend, the net profit in 2024 could have been $7.5bn higher – in that case it would have eliminated the drop from 2023 and left the net margin flat year-on-year.Industry analysts say airlines will not be able to expand or modernise their fleets as planned, if aircraft deliveries get further delayed. This is especially problematic for low-cost carriers and emerging market airlines with aggressive growth ambitions.Globally, new routes or frequency increases are also being postponed due to aircraft shortages.Airlines are forced to keep older aircraft flying longer, which impacts fuel efficiency and maintenance costs.With manufacturers behind schedule, airlines increasingly turn to leasing companies to fill the gap. Lessors seem to be capitalising on the high demand, pushing lease prices up substantially. Leasing aircraft often involves longer-term commitments and less customisation, limiting operational flexibility, analysts point out.The delay in aircraft deliveries means airlines have fewer backup aircraft, making them more vulnerable to delays and maintenance-related disruptions. Increased strain on existing fleets often leads to scheduling challenges and potential delays, industry analysts point out. Airlines with sustainability targets are also struggling in view of the delay in new aircraft deliveries, they say, as older planes are less fuel-efficient and emit more CO2.