9 months ago
IATA Chief: Airlines Deserve Fair Reward Amid Supply Chain Woes
Imagine car factories can't get all the parts they need to build new cars, so they're making fewer cars and it's taking a long time to get them.
This is happening with airplanes too.
The boss of a big airline group, Willie Walsh, is saying that the companies that make the airplane parts and engines are doing well, even making more money, while the airlines are struggling with high costs and delays.
He believes the airlines, which don't make a lot of money, should be treated more fairly.
He also mentioned that new taxes could make things even harder and that cleaner fuel for planes is still hard to make a lot of.
Right now, there are more planes on order than ever before, but getting them is difficult because of these problems.
IATA chief Willie Walsh stated airlines need to be properly rewarded amid ongoing supply chain issues affecting aircraft deliveries.
Walsh expressed frustration with supply chain problems and concerns over Original Equipment Manufacturers (OEMs) potentially increasing prices due to tariffs.
He noted that OEMs, particularly engine makers, are improving financial performance during a period of disruption that costs airlines significantly.
AAPA Director General Subhas Menon warned that tariffs will negatively impact supply chain recovery and increase non-fuel costs for airlines.
Supply chain challenges are projected to cost the global airline industry over USD 11 billion in 2025, with a record number of aircraft on backorder.
- Who
- IATA Director General Willie Walsh and AAPA Director General Subhas Menon
- What
- Expressed concerns about supply chain issues impacting aircraft deliveries and OEM price increases, advocating for fairer rewards for airlines.
- Where
- Bangkok, at the 69th Assembly of Presidents of the Association of Asia Pacific Airlines (AAPA)
- When
- November 15
- Why
- Supply chain disruptions are causing significant costs and delays for airlines, while Original Equipment Manufacturers (OEMs) are reportedly increasing prices and improving financial performance.
Key facts
- Organization Represented by Willie Walsh
- International Air Transport Association (IATA)
- IATA's Membership
- Nearly 350 airlines, accounting for 85% of global air traffic
- Event
- 69th Assembly of Presidents of the Association of Asia Pacific Airlines (AAPA)
- Location of Event
- Bangkok
- Estimated Cost of Supply Chain Challenges for Airlines (2025)
- More than USD 11 billion
- Global Commercial Aircraft Backlog (last year)
- Over 17,000 aircraft
Quotes
Willie Walsh
IATA Director General
“There's got to be a correction to this. Airlines need to be properly rewarded. I don't object to anybody making profits.... But we've got to see a greater balance and we need to see these critical suppliers raising their game and raising their game significantly to ensure that they're serving the industry in the way that we need to be served”
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Subhas Menon
AAPA Director General
“Supply chain recovery is now undermined by tariffs which increase supplier costs. While aircraft and engines are exempt, their raw materials, and components which come from many parts of the world, are not. Tariffs also affect demand through inflation. It is a double whammy as both supply, and demand sides of the market are affected”
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