Despite increased business travel and growing leisure demand, supply chain issues and more plague airlines. Here’s how this fact will affect you.
Yes, business travel spending continues to grow, year after year. Yes, leisure travel is also seeing increased demand as more and more Travelers get back to planning domestic and international trips post-pandemic. Additionally, demand for specialty aircraft that can make air travel more sustainable is increasing, too.
Despite all these facts, though, various other factors—such as supply chain issues—are at play. These factors can make airlines think twice about expanding service or adding new aircraft to their routes. One McKinsey study found that “aerospace Executives were about 18 times more likely to mention supply-chain-related terms, such as ‘shortages,’ during earnings calls in 2022 than they were in 2014…their views on supply chain performance also showed a dramatic negative shift starting in 2020.”
Here’s what to know about the state of supply chain issues’ current impact on travel and how it may affect you in the near future.
Undelivered Aircraft are at a Record High
According to IATA data from December 2024, aircraft deliveries are down, and, in fact, the backlog of new aircraft within the industry has reached a record high—to the tune of 17,000 plane orders unfulfilled. In 2024, airlines took delivery of just over 1,200 new aircraft, a number 30% fewer than the original estimate from the beginning of 2024. Compare this number to the industry’s peak of 1,813 aircraft delivered in 2018.
Currently, industry experts are hopeful that aircraft deliveries will rebound to at least 1,800 deliveries in 2025, but those are just that—hopes.
No New Aircraft? That Spells Trouble
As a result of fewer new aircraft being delivered to airlines, you’ll likely notice something. You’re flying on older and older aircraft.
The same IATA report linked above notes that now, the average aircraft age is about 15 years old. Comparatively, from 1990 to 2024, the average age of any aircraft was 13.6 years old.
Not only does older aircraft mean a somewhat less enjoyable flying experience for most Travelers (AvGeek or otherwise), but also greater maintenance costs. These are costs the airline may pass on to you. Older aircraft are also less sustainable aircraft. This is definitely not good news if you’re working to bring down your organization’s carbon footprint.
It’s Not Just Aircraft Parts That Are in Short Supply
When you think of supply chain issues in relation to the aviation industry, you might automatically think about shortages related to aircraft parts. However, as a CNBC article reported last year, it’s not just parts that manufacturers like Boeing and Airbus need more of. A talent shortage is also impacting the new aircraft pipeline. At the time, analysts said that fixing this labor shortage could take years, somewhere between three to five.
The labor shortage is due to a few issues. There was an exodus of workers who left the industry during the pandemic. Currently, there’s industry-wide low pay that fails to attract new workers. Younger new workers are particularly unlikely to join the A&D industry, according to another McKinsey report, due to the way in which the A&D industry lags behind other industries in key areas such as “culture and values, diversity and inclusion, leadership and speed.”
The earlier McKinsey study linked above furthermore noted that talent shortages can exacerbate supply chain issues. Personnel may not be equipped to deal with supply chain problems due to the lack of institutional/tribal knowledge that left manufacturers along with the exodus of their long-time employees.
Airlines are Ordering Fewer Planes, Too
Beyond aircraft manufacturers simply putting out fewer planes and not fulfilling orders at the rate at which they were expected to, airlines are just ordering fewer planes, too.
The same CNBC article linked above explained that this is partially due to manufacturers struggling to meet demand. In other words, it’s a cycle. The manufacturers can’t fulfill orders. Airlines don’t place more orders if they can’t be fulfilled.
However, airlines are also choosing not to order new planes due to cost. Another CNBC article found that airlines had “flooded” the U.S. market with new flights in 2024. That’s resulted in extra costs, on top of already increasing costs of doing business. As a result, low-cost airlines like Frontier have deferred aircraft orders by several years, as have JetBlue and Spirit Airlines.
Airlines Pulling Back Means Less Connectivity
As airlines pull back and look for ways to save cash amid supply chain issues, increasing costs of doing business, etc., they’re not only deferring plane orders, kicking them down the road. They’re also reducing connectivity and pulling out of markets that they’ve even just recently arrived in.
For you, this could mean that you no longer have access to valuable business routes or those routes are not available at a price point that you’d prefer.
What Can You Do?
What can a business Traveler, Executive or Travel Manager do amidst all this uncertainty, supply chain issues and rising costs?
It’s time to, now more than ever, think about how you travel and/or how you book travel for those within your organizations. It’s time to make smart decisions regarding airline partnerships and business Traveler loyalty, so that you’re set up for future success, rather than finding yourself blindsided by partnering with an airline that reduces routes and increases costs.
Keep a Finger on the Pulse of Business Travel
For more of what to expect from the aviation industry, as well as business travel as a whole, visit the JTB Business Travel blog.
Need help making your business travel program more efficient and profitable? Check out the large suite of services that JTB Business Travel offers to assist Travelers, Executives and Travel Managers.
