IATA: Fuel 40% of 2025 Carrier Costs Amid Jet Delays

SECAUCUS, NJ (DTN) – Airlines face an estimated $11 billion in extra costs this year, with nearly 40% of that coming from higher fuel expenses as carriers rely on aging planes amid aircraft delivery delays, the International Air Transport Association (IATA) said in a study issued Monday (10/13).

Excess fuel costs alone are estimated to hit $4.2 billion in 2025, IATA said in the study, attributing this to older fleets that consumed more fuel than modern jets – the result of which sent airline operational costs spiraling.

Worldwide commercial aircraft backlog hit a record of over 17,000 in 2024 — far above the typical 13,000 per year seen before 2020 – IATA stated.

“Unprecedented waits for aircraft, engines and parts and unpredictable delivery schedules … together have sent costs spiraling by at least $11 billion for this year and limited the ability of airlines to meet consumer demand,” Willie Walsh, IATA’s director-general said.

The total cost impact for 2025 is also being pushed higher by additional maintenance costs, estimated at $3.1 billion, as the entire global fleet ages and requires more frequent checks.

Increased engine leasing costs will account for $2.6 billion, as engines spend more time in maintenance and lease rates have risen by 20–30% since 2019. Further increasing the financial pressure, airlines are stocking more spare parts to guard against supply disruptions, incurring surplus inventory holding costs of $1.4 billion.

Beyond the financial crisis, the supply-demand imbalance is restricting capacity. Passenger demand grew 10.4% in 2024, outpacing the 8.7% expansion of aircraft capacity and leading to record load factors of 83.5%.

To ease the crisis, the report urges original equipment manufacturers and airlines to collaborate on strategic solutions. Walsh suggested opening the aftermarket to give airlines greater access to parts and services as one step.