Top Aviation Supply Chain Challenges You Might Not Have Thought About

The aviation industry has shown remarkable resilience in recovering from the COVID-19 pandemic, with passenger numbers projected to exceed five billion in 2025 and total industry revenues expected to surpass the US $1 trillion mark for the first time (Alton Aviation).

However, this recovery is accompanied by a complex array of supply chain challenges that stakeholders must navigate to ensure sustained growth and operational efficiency. 

1. Persistent supply chain disruptions 

The aviation industry's recovery continues to be hampered by significant supply chain challenges affecting airlines, suppliers, and maintenance, repair, and overhaul (MRO) providers. 

The aftermath of the COVID-19 pandemic has delayed lead times for essential components, with some extending beyond a year. This scarcity hampers airlines' capacity to expand and maintain fleets efficiently. Notably, engine manufacturers have faced acute challenges due to the bankruptcy of smaller suppliers during the downturn.

Additionally, shortages in wiring components, electronics, and raw materials like aluminum and titanium have further strained production. The aftermarket is also affected, with used parts becoming increasingly scarce.

These supply chain disruptions have hindered airline capacity expansion, affecting their ability to meet the surging travel demand. For instance, Airbus has limited its A350 production to around six aircraft per month (Reuters), postponing the A350 freighter's launch to 2027 due to these challenges (Air Cargo News). 

The aviation industry's recovery is underway, but persistent supply chain challenges necessitate strategic investments and adaptive measures for sustainable growth.

2. Geopolitical tensions and trade policies

​The aviation industry remains susceptible to geopolitical disruptions, with conflicts, trade restrictions, and resource shortages affecting airlines, MROs, and suppliers. 

While recent Russia-Ukraine peace talks offer hope for reopening restricted airspace, ongoing sanctions on Russian exports, including titanium and rare earth minerals, continue to challenge supply chains (WSJ, Times UK). 

Additionally, U.S.-China trade tensions, particularly regarding semiconductor exports, impact avionics and aircraft manufacturing (NBC). 

In response, companies like GE Aerospace are investing heavily in U.S. manufacturing to bolster production capabilities, planning to invest nearly $1 billion in 2025 to enhance manufacturing capacity and adopt new technologies, aiming to meet the escalating demand for engines and spare parts (Reuters). ​

3. New wave of cybersecurity threats 

As aviation becomes more digitized, cyber risks have surged, with attacks increasing 74% since 2020 (U.S. Senate Committee on Commerce, Science, & Transportation). Ransomware, cyber espionage, and supply chain hacks now threaten airlines, airports, and MRO providers. GPS spoofing incidents have also alarmed pilots, disrupting cockpit systems and raising air safety concerns.

Recent breaches underscore the industry's vulnerabilities. In early 2025, the International Civil Aviation Organization (ICAO) faced a potential data breach, with tens of thousands of records allegedly stolen (Reuters). Regulatory bodies like ICAO are implementing cybersecurity standards, while airlines and airports invest in system upgrades and threat detection tools.

To counter evolving threats, the industry is prioritizing collaborative defense strategies, workforce training, and stronger regulatory enforcement. With aviation's reliance on interconnected systems growing, cybersecurity will remain a top industry concern.

4. Workforce shortage

The aviation industry in 2025 continues to face significant labor shortages for pilots, maintenance technicians, and air traffic controllers. This deficit is compounded by challenges in attracting talent from outside the industry, hindering innovation and efficiency.​

Despite efforts to replenish the workforce, projections indicate a 20% shortfall in maintenance technicians by 2028 (LARA Magazine). The global demand for pilots remains high, with significant shortages leading to increased salaries and competition among airlines. 

Air traffic controllers are also in short supply, raising concerns about safety and efficiency in air traffic management. ​

Additionally, the allure of emerging sectors, such as space exploration companies like SpaceX and Blue Origin, has drawn talent away from traditional aerospace firms, leading to a "brain drain" that hampers innovation (Financial Times). ​

5. Environmental regulations 

​As of 2025, public concern over aviation's environmental impact has intensified, transforming "flygskam" (flight shame) from a niche concept into a widespread movement scrutinizing air travel's carbon footprint (Euronews). ​

In response, governments have enacted stringent regulations. The European Union's ReFuelEU Aviation Regulation, effective from January 2025, mandates that fuel suppliers blend at least 2% Sustainable Aviation Fuel (SAF) into their total jet fuel supply, with targets escalating to 70% by 2050 (European Commission Mobility and Transport). Similarly, the UK has introduced its own SAF mandates, aligning with broader decarbonization goals (UK Department for Transportation). ​

Despite these efforts, the aviation industry's progress toward decarbonization has been slower than anticipated. 

The International Air Transport Association (IATA) acknowledges that achieving net-zero emissions by 2050 necessitates removing at least 1.8 gigatons of CO₂ annually from aviation operations by that year, totaling a cumulative 21.2 gigatons from now until mid-century (IATA). However, current SAF production levels remain insufficient to meet these ambitious targets, leading to concerns about the compliance feasibility. 

The convergence of heightened public environmental consciousness and stringent regulatory measures has profound implications for the aviation sector. Airlines are compelled to accelerate the adoption of cleaner technologies and fuels, often at substantial financial costs. 

Failure to adapt promptly risks not only regulatory penalties but also the potential loss of market share, as environmentally conscious travelers favor sustainable alternatives (AFAR). Thus, the industry faces mounting pressure to innovate and transform to align with global sustainability expectations.​

6. Infrastructure constraints

Artificial intelligence (AI) and automation are reshaping aviation in 2025, with AI-driven maintenance, predictive analytics, and autonomous ground operations. 

Major airlines have integrated AI-powered systems to reduce delays. Some carriers report a 25% decrease in unplanned maintenance disruptions due to predictive maintenance tools (McKinsey & Company). 

Meanwhile, automation in airport security has accelerated passenger screening by up to 40%, cutting down wait times and improving operational flow.

Despite these advances, the transition poses integration challenges. Airlines and MROs are investing heavily in IT infrastructure, with global spending on aviation tech projected to reach $46 billion in 2026 (Mexico Business News). 

However, compatibility issues between legacy systems and modern AI solutions have slowed adoption, forcing operators to overhaul outdated processes.

Additionally, automation has intensified workforce concerns. AI-driven cockpit assistance and autonomous tugs are reducing the need for human intervention, prompting pilot unions to push back against the expanded use of single-pilot operations (Business Wire, ALPA). 

While technology is revolutionizing aviation, balancing innovation with safety and workforce adaptation remains a critical challenge.

7. Biological security and health-related travel disruptions 

By 2025, COVID-19 is no longer a major disruptor, but new health threats continue to impact aviation. Airlines are adopting AI-powered health screenings and targeted biosecurity measures to prevent sudden travel restrictions.

More recent outbreaks, including the H5N6 avian flu and antibiotic-resistant infections, have led to temporary travel advisories, particularly in Southeast Asia and Africa, where passenger demand remains volatile (University of Minnesota CIDRAP). While North America and Europe have stabilized, regional disparities persist.

Beyond passenger travel, aviation supply chains remain vulnerable to workforce disruptions from outbreaks affecting pilots, crew, and MRO staff. Airlines are now cross-training staff, automating key tasks, and diversifying suppliers to mitigate risks.

Health-related travel disruptions may be less severe than in 2020, but the industry now treats biological security as a permanent challenge requiring continuous adaptation.

8. Continued decline of widebody market 

The aviation industry's post-pandemic recovery has been predominantly driven by domestic travel, especially in North America. 

In April 2023, domestic revenue passenger kilometers (RPKs) exceeded pre-pandemic levels by 2.9%, while international RPKs were at 81.1% of April 2019 figures (IATA). 

This disparity has led to a significant shift in aircraft production priorities. Airbus, for instance, is ramping up its A320 Family production, aiming for 75 aircraft per month by 2027, up from the current rate of approximately 46-47 per month (AeroTime). 

9. Fuel prices 

​As of March 2025, jet fuel prices have stabilized, with the Argus US Jet Fuel Index™ reporting an average price of around $2.00 per gallon (Airlines.org).  

Despite this stabilization, airlines face financial pressures due to the integration of Sustainable Aviation Fuel (SAF) into their operations. SAF costs are higher than conventional jet fuel, with estimates indicating that limited SAF will add approximately $3.8 billion to industry fuel expenses in 2025, up from $1.7 billion in 2024 (Green Air News). 

The increased costs associated with SAF and other operational expenses have contributed to higher airfares. Some industry analyses suggest that average airfares are unlikely to decrease significantly in 2025, as airlines balance supply constraints and rising costs.

10. Business travel resurgence falls short  

The COVID-19 pandemic has permanently transformed business travel, with corporate travel spending expected to reach $1.64 trillion in 2025, up from $1.48 trillion in 2024, yet still not fully rebounding to pre-pandemic levels (BTN Europe). 

This sustained downturn poses significant challenges, particularly for smaller regional airports that have historically depended on business travelers for operational viability. 

Major airlines have reduced or ceased operations at certain regional airports. For instance, United Airlines announced plans to exit 11 small markets indefinitely, significantly limiting air service options for those communities (Business Insider). 

This loss of air connectivity hampers local economies, making it challenging for businesses to attract clients and conduct operations efficiently. 

The sustained decline in business travel and the resulting impact on regional airports have broader economic and social implications. Reduced air services isolate smaller communities, limiting access to broader markets and opportunities. Local businesses suffer from decreased accessibility, leading to potential declines in investment and economic growth. Individuals and businesses must bear higher costs and longer travel times, affecting productivity and quality of life (Time).​

11. Persistent economic volatility 

​As of early 2025, global economic growth remains subdued. The International Monetary Fund (IMF) forecasts global growth at 3.3% for both 2025 and 2026, slightly below the historical average of 3.7%. 

Similarly, the World Bank projects global growth to hold steady at 2.7%, highlighting concerns about the economy settling into a low-growth trajectory insufficient to alleviate global poverty (World Bank: Global Economic Perspectives).

This has significant implications for the aviation industry. Despite a projected 8.0% increase in passenger demand for 2025, airlines face challenges due to supply chain disruptions, geopolitical uncertainties, and rising operational costs. These factors contribute to increased ticket prices, which dampen consumer travel (IATA Press Room). 

Moreover, major U.S. airlines have reported a decline in domestic travel demand, leading to reduced revenue forecasts (Financial Times). 

12. Governments may not bail out airlines again

​During the COVID-19 pandemic, governments worldwide provided substantial financial support to airlines, with the U.S. alone granting approximately $54 billion to carriers. This aid was pivotal in preventing bankruptcies and preserving jobs (Reuters). 

However, these bailouts were not without controversy. While many of the funds were structured as loans—some repaid ahead of schedule—public perception issues arose due to ongoing travel disruptions. Taxpayers, policymakers, and media outlets debated the appropriateness of the assistance.

In an ideal scenario, the aviation industry would remain stable, negating the need for further intervention. Yet, should future crises emerge, securing similar financial support may prove challenging, especially with a current administration that favors curbing federal government. 

13. Integrating Artificial Intelligence (AI) and Automation in Aviation

Artificial intelligence (AI) and automation are reshaping aviation, enhancing efficiency, safety, and cost management. The AI in aviation market, valued at $728 million in 2022, is projected to reach $23 billion by 2031 (Symphony Solutions). 

AI-driven predictive maintenance helps airlines prevent failures by analyzing aircraft sensor data and reducing downtime and repair costs (Air Cargo Week). Flight optimization tools use AI to cut fuel consumption and emissions by identifying efficient routes, while AI-powered air traffic management improves safety and reduces delays (Aerotime).

However, automation raises concerns. While AI enhances operations, skilled human oversight is still required, prompting a need for reskilling. Job displacement fears persist, though AI is expected to create some new roles in system management and data analysis 

Balancing AI technology with workforce adaptation will be key to long-term success.

14. Material shortages & rare earth dependency 

The aviation industry's reliance on rare earth elements (REEs) has become a critical concern. REEs are essential in manufacturing advanced avionics and the emerging electric aviation sector. China currently dominates the global rare earth supply chain, mining and refining most of the world's REEs (Karve International). It possesses 85% of the earth’s REEs (Area Development). 

Demand for REEs is projected to increase by 400% to 600% over the next few decades, driven by the push toward electrification and renewable energy (Area Development). This surge in demand could exacerbate existing supply chain challenges.

The U.S. Department of Defense has recognized this vulnerability and, since 2020, has awarded more than $439 million to establish domestic rare earth element supply chains, including processes to convert refined materials into metals and magnets (U.S. Department of Defense). ​

15. Urban air mobility & regulatory uncertainty

The advent of electric vertical takeoff and landing (eVTOL) aircraft presents both opportunities and challenges for urban air mobility (UAM). 

Companies like Joby Aviation are developing air taxis capable of carrying four passengers over distances of up to 100 miles at speeds reaching 200 mph (Business Insider). However, integrating eVTOLs into existing airspace requires careful coordination with air traffic management systems and traditional aviation, posing significant regulatory challenges.

Infrastructure development, such as establishing vertiports, is crucial for the widespread adoption. In Brazil, Eve Air Mobility has joined a two-year regulatory sandbox led by the National Civil Aviation Agency (ANAC) to develop the country's vertiport infrastructure and address the challenges of scaling eVTOL operations (Airport Technology). 

Additionally, public acceptance and safety concerns remain significant barriers. For instance, a project to introduce flying taxis in Paris for the 2024 Summer Olympics faced setbacks due to noise concerns, public outcry, and regulatory delays, highlighting the complexities involved in implementing UAM solutions (Le Monde). ​

Final word on navigating supply chain challenges 

The aviation industry is at a crossroads, with supply chain challenges dictating its trajectory for years to come. From geopolitical tensions to workforce shortages to international material dependencies, stakeholders must take a proactive approach to build resilience. 

Future-oriented airlines, MRO providers, and manufacturers are investing in technology, diversifying supply sources, and exploring sustainable solutions, but long-term success will require continued research, agility, and collaboration.

As regulations shift and market demands evolve, the ability to adapt will define industry leaders. Whether through AI-driven efficiencies, strategic workforce investments, or sustainable fuel adoption, relentless innovation is key. Those who embrace change and prepare for ongoing disruptions will thrive in the complex future of global aviation.