GENEVA (Dec 11): The International Air Transport Association (IATA) will look for evidence of anti-competition behaviour among plane makers and parts suppliers as the supply chain disruption dragging the aviation industry's recovery is expected to persist for at least another two years.
"There could well be evidence that this is a case of suppliers being able to abuse their dominant position" in the market as post-pandemic demand is so strong that retired planes have to be brought back into the system, said IATA director general Willie Walsh.
The association had in the past looked at whether there is evidence of anti-competition on the part of some suppliers, said Walsh at the IATA Global Media Day 2024 here.
"That's an area we will look at again, for us to evaluate the behaviour of some of these key players, because what is clear is that the industry is facing very significant increases, way above inflation, for some of the spare parts that we are required to use on our aircraft and engines.
"Dealing with some of these suppliers who, as I said, are critical suppliers to the industry, but appear to be immune from normal competitive dynamics is very frustrating to us, and that's something that we are looking at again.
"I'd prefer that we didn't have to go down that road, but as I said, I think we've been patient for too long now, and the situation isn't improving, and the performance is unacceptable... we need to start looking at other avenues to explore, and I think that's an area where I have to make a significant call," Walsh said.
IATA in its 2025 outlook sees the aviation industry growth to be capped by sustained "severe" supply chain issues.
This is seen with just 1,802 aircraft deliveries forecast next year, well below its earlier expectation for 2,293 units, representing a shortfall of 491 units or 21%. So far for 2024, actual deliveries are 1,254 units, 30% lower than initial projection.
Further downward revision for 2025 is "quite possible", IATA said, adding that the backlog for new aircraft has reached a record high of 17,000 planes.
"At present delivery rates, this would take 14 years to fulfil, double the six-year average backlog for the 2013-2019 period. However, the waiting time is expected to shorten as delivery rates increase," it said.
The delays have affected the likes of Malaysia Airlines, which received its first Airbus A330neo just last month after two months of delays. In May, MAS had said it expected three A330neos to be delivered this year.
Meanwhile, malfunctioning parts and delays in repairs contributed to about 5,000 aircraft being grounded, representing 13% of the global fleet of 35,166 units.
"While this has improved recently, parked aircraft remain four percentage points higher than pre-pandemic levels [equivalent to some 1,600 aircraft]. Of these, 700 [2% of the global fleet] are parked for engine inspections. We expect this situation to persist into 2025," IATA added.
The global shortage is beginning to affect fleet replenishment, as the global fleet average age has risen to a record high of 14.8 years, compared with the long term average of 13.6 years in 1990-2024.
"Exceptional demand for leased aircraft pushed leasing rates for narrow body aircraft to levels 20-30% higher than in 2019," it added.
IATA in 2016 filed complaint in an EU investigation into alleged anti-competitive behaviour on the part of parts suppliers, with respect to their control of aftermarket services. This led to dialogues with the partmakers, CFM and Rolls Royce, which resulted in agreements to address business practices and production of legitimate parts by non-OEMs (original equipment manufacturers).