The global aviation industry is facing renewed turbulence over the past 48 hours, marked by mounting supply chain pressures, emerging market entrants, and regulatory uncertainties. One of the most pressing challenges is the continued shortage of aircraft engines, particularly affecting Airbus. As of July 2025, Airbus has a backlog of about 60 completed airframes waiting for engines due to supplier delays at CFM International and Pratt & Whitney. This bottleneck has caused a 20 percent reduction in A320neo deliveries and forced Airbus to absorb nearly one billion euros in excess inventory costs. The problem is systemic, as 70 percent of aerospace companies now identify supply chain resilience as their top priority amid disruptions in labor, raw materials, and logistics. Shipping costs from Asia to Europe are up fivefold because of rerouting and droughts impacting vital corridors, worsening delivery delays and raising costs across the sector[2][4].

In response, industry leaders are adapting their forecasts and operations. Lufthansa’s CEO has emphasized that 2025 will be pivotal, with a renewed push for digital transformation to build resilience. Meanwhile, tariffs introduced in the U.S.—some between 10 and 200 percent on imported aircraft components and raw materials—are inflating prices and disrupting established global trade flows. This further compounds the challenges for manufacturers and airlines[8].

On the competition front, new players like Saudi Arabia’s Riyadh Air are entering the market aggressively. Riyadh Air has confirmed it will take delivery of one Boeing 787-9 aircraft each month and, starting October 26, 2025, will operate daily flights to London Heathrow. This is a bold move considering ongoing aircraft delivery delays, but the airline’s strategic acquisition of coveted Heathrow slots shows how new entrants are capitalizing on shifting global demand and availability[1].

Consumer behavior is shifting as uncertainty remains over flight schedules and rising ticket prices. In Asia, the abrupt collapse of ticketing platform Flight Expert has left thousands of travel agencies and consumers in disarray, highlighting vulnerabilities in the online travel space[7].

Compared to last quarter, the industry is under even greater operational and financial strain, but leading players are doubling down on supply chain innovation and market expansion to weather the storm.

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This content was created in partnership and with the help of Artificial Intelligence AI