IATA Warns Rising OEM Costs Could Erode Airline Safety Margins

The International Air Transport Association has issued a warning that escalating aircraft and parts costs, coupled with razor-thin profit margins, risk eroding the financial buffers that underpin aviation safety and resilience.

Speaking at an industry conference on June 14, 2026, IATA leadership highlighted a structural imbalance between airlines and original equipment manufacturers. According to IATA and Oliver Wyman data, airlines are projected to face more than $11 billion in extra costs in 2025 due to supply-chain disruptions. This includes $4.2 billion in additional fuel costs as carriers operate older, less efficient aircraft longer while awaiting new deliveries, such as those in the Airbus A320 family or Boeing 737-800 fleets.

Financial Pressures and Operational Risk

IATA Chief Economist Marie Owens Thomsen has noted that the industry frequently suffers from returns below the cost of capital. This financial squeeze is compounded by currency volatility, as 55% to 60% of global airline costs are denominated in U.S. dollars. IATA warns that these cost pressures could compromise safety buffers if airlines are forced to defer fleet modernization or increase the use of aging assets without corresponding investment.

While IATA projects a 3.9% net margin for 2026, the association argues this remains fragile for a safety-critical sector. Academic research on economic pressures and airline safety performance suggests that persistent margin pressure can elevate operational risk. However, aviation regulators maintain that strict airworthiness standards and Safety Management Systems are designed to prevent financial stress from translating into direct safety compromises.