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Jet Delivery Delays Slow Airline Expansion

Jet Delivery Delays Threaten Airline Expansion Amid Soaring Demand
Airlines are poised to generate over $40 billion in profits this year, supported by low fuel prices and strong economic growth, according to a recent analysis by Irish aircraft lessor Avolon. However, the industry faces significant challenges as unprecedented backlogs in new aircraft deliveries threaten to impede expansion plans well into 2026.
Production Backlogs and Market Impact
Avolon, one of the world’s leading aircraft leasing companies, reports that order backlogs at major manufacturers Airbus and Boeing now extend beyond 11 years based on current production rates. This prolonged delay complicates strategic growth initiatives for airlines, which may be compelled to continue operating older, less fuel-efficient jets or scale back their expansion ambitions. The shortage of new aircraft is already influencing the market; Ryanair recently warned that European travelers could face airfare increases of 3 to 4 percent this year due to constrained capacity driving up prices.
In response to these backlogs, both Boeing and Airbus have increased production. Boeing raised its deliveries by 75 percent last year, while Airbus achieved a more modest 3.5 percent increase. Despite these efforts, the gap between orders and deliveries remains substantial, prompting airlines to adjust their strategies. For instance, Delta Air Lines is focusing on more profitable segments such as premium cabins, utilizing new aircraft like the Boeing 787 Dreamliner to attract higher-yield customers.
Industry Adjustments and Regional Developments
The delivery delays are prompting widespread adjustments across the industry. Airlines are revising profit forecasts and expansion plans amid heightened competition and geopolitical uncertainties. Korean Air has cautioned that these factors could complicate airline strategies in 2026. Meanwhile, consolidation continues in Europe, with Air France-KLM tripling its stake in Scandinavian carrier SAS to 60.5 percent, and Lufthansa planning to increase its holding in Italy’s ITA from 41 percent to 90 percent. Low-cost carriers, led by Ryanair—which is scheduled to receive 29 new Boeing jets this year—remain at the forefront of growth in the region.
Avolon projects that manufacturers will deliver $120 billion worth of new aircraft in 2024, representing a 20 percent increase over 2023. Leasing companies, including Avolon and its Irish peers Aercap and SMBC Aviation Capital, are expected to finance approximately half of these deliveries. The leasing model, whereby companies purchase aircraft and lease them to airlines, continues to be a cornerstone of the industry, offering airlines flexibility amid delivery uncertainties.
Dublin, a global hub for aircraft leasing, will host the upcoming Airline Economics conference, which will convene industry leaders to address these challenges. Jim Morrison, Avolon’s chief risk officer, highlighted emerging growth regions such as India, the United Arab Emirates, and Saudi Arabia, noting that “airline financial performance continues to strengthen, with the industry expected to record its fourth consecutive year of profitability.”
Despite robust profits, the persistent delays in jet deliveries may constrain the industry’s ability to fully capitalize on surging demand, compelling airlines to reconsider their growth strategies in an increasingly complex market.

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