Airline profits: IATA chief Willie Walsh urges engine makers to end price gouging

IATA chief Willie Walsh warned on Sunday that airlines were suffering from long-running supply chain problems. Walsh said aircraft engine makers must stop overcharging carriers as disruptions continued. Walsh also told the 82nd IATA Annual General Meeting that these issues were hurting costs and efficiency across airline fleets.

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Walsh said industry earnings were expected to weaken in 2026. Airlines were projected to post net profit of USD 23 billion in 2026. That compared with USD 45 billion last year. Walsh added that the net margin was estimated to fall to 2 per cent from 4.2 per cent.

IATA supply chain failures raised airline costs

The International Air Transport Association represents over 370 airlines worldwide. These carriers account for around 85 per cent of global air traffic. Walsh said airlines were paying more for fuel. Walsh linked this to less efficient fleets, as the aerospace supply chain still failed to deliver engines and products.

Airlines have been grappling with delayed aircraft deliveries and engine problems. Walsh said the aircraft order backlog was over 18,000 aircraft. Walsh added that the average fleet age stood at a record 15.2 years. Walsh said these delays were keeping older jets in service longer than planned.

"Being short of over 5,000 more efficient replacement aircraft than we had counted on means missed efficiency gains, not to mention higher release rates and increased maintenance costs.\"

Walsh put a dollar figure on the impact of disruptions. Walsh said supply chain failures cost airlines at least USD 11 billion in 2025. Walsh also said failures were increasing maintenance spending. Walsh added that lease release rates were rising as carriers kept older aircraft longer.

IATA chief Willie Walsh criticised engine OEMs

Walsh directed a clear message at engine Original Equipment Manufacturers. \"My message to the engine OEMs Original Equipment Manufacturers is simple. Stop doubting us and get back to making great engines that work and that last.\" Walsh said customers would not accept failures that stretched into the next decade.

\"Allowing these failures to extend into the next decade is totally unacceptable to your customers,\" Walsh said.

Walsh is set to take over as the CEO of Indias largest airline, IndiGo, later this year. Walsh made the comments while outlining industry pressures from engine shortages. Walsh said airlines were facing higher operating costs as supply chain gaps continued to limit newer, efficient aircraft.

With inputs from PTI