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Supply Chain Disruptions Affect Asia-Pacific Airlines

May 13, 2025By ePlane AI
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Supply Chain Disruptions Affect Asia-Pacific Airlines
Supply Chain
Asia-Pacific Airlines
Aircraft Deliveries

Supply Chain Disruptions Threaten Growth of Asia-Pacific Airlines

KUALA LUMPUR, 14 May 2025 — Asia-Pacific airlines are confronting significant challenges as ongoing supply chain disruptions threaten to impede the region’s aviation growth, despite sustained strong demand for international passenger and cargo services. According to the Association of Asia Pacific Airlines (AAPA), while demand remains robust, growth is slowing in 2025, with average load factors reaching a record 83 percent, underscoring the capacity constraints faced by carriers.

Impact of Supply Chain Constraints and Trade Barriers

Subhas Menon, Director General of AAPA, highlighted that over 20 percent of aircraft deliveries scheduled for 2025 are expected to be delayed. He attributed these setbacks to unresolved supply chain issues stemming from the pandemic, compounded by new tariffs imposed by the US government. These trade measures are exacerbating an already fragile ecosystem, increasing costs and slowing production. Aircraft and engine manufacturing rely on intricate global supply chains, and the introduction of tariffs and retaliatory actions is disrupting the efficiencies built on open markets and international cooperation. Menon emphasized that while free trade has historically supported aviation and broader economic growth, the current rise in trade barriers threatens to undermine these gains.

Consequences for Sustainability and Operational Costs

The delays in aircraft deliveries are forcing airlines to continue operating older, less fuel-efficient aircraft, which hampers efforts to reduce carbon emissions. This challenge is intensified by the limited availability of Sustainable Aviation Fuel (SAF). Of the 1.5 million tonnes of SAF projected for production in 2024, only 1 million tonnes were actually produced. Menon expressed concern over the limited participation of traditional fuel suppliers in the SAF supply chain, noting that demand continues to outpace supply and that costs remain prohibitively high. Furthermore, regulatory frameworks designed to encourage SAF production are still underdeveloped, inconsistent, or insufficient, further complicating progress toward sustainability goals.

Operational costs across the sector are rising amid these supply constraints, with airlines operating on increasingly narrow margins. The combination of regulatory challenges, escalating equipment costs, and persistent shortages threatens both long-term growth and sustainability. Market responses have been mixed; some carriers, such as Ryanair, have reported negative operating margins but remain cautiously optimistic about a strong summer season driven by limited supply. In response to these pressures, airlines are pursuing strategic partnerships and focusing on improving working capital and strengthening supplier relationships to better manage supply chain inefficiencies.

The Need for Coordinated Action

Menon underscored the vital role Asia-Pacific airlines play in connecting economies and communities, describing aviation as a key driver of sustainable economic and social development in the region. He stressed that while airlines do not manufacture aircraft, engines, fuel, or manage airports and airspace, they face increasing difficulty in meeting demand due to factors beyond their control. Menon called on governments and suppliers to take decisive action to address these disconnects and support the industry.

With no immediate resolution to the supply chain challenges in sight, the Asia-Pacific aviation sector faces an uncertain future, striving to balance strong market demand against the realities of constrained capacity and mounting external pressures.

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