Latam CEO says aircraft, engine supply-chain problems likely to persist for two or three years
LATAM Airlines Group CEO Roberto Alvo has indicated that supply chain challenges related to aircraft and engine deliveries are expected to persist for two to three years, according to the airline’s fourth-quarter 2024 results published on January 31, 2025. While the airline is not currently experiencing significant aircraft delivery delays, Alvo emphasized that engine supply constraints—particularly with Pratt & Whitney and Rolls-Royce—pose a more pressing concern.
The airline reported that only a small number of its 787 and A320 family aircraft are currently grounded due to engine issues, but it has factored this risk into its guidance. Alvo noted that discussions with engine manufacturers have been “constructive,” though no immediate resolution to the delays is expected.
LATAM is set to receive 22 A320 aircraft and two 787 aircraft in 2025, with Alvo expressing confidence in the timely delivery of the Airbus aircraft but acknowledging that the Boeing 787s remain “at risk” of being delayed. These supply chain issues are not unique to LATAM. Air India CEO Campbell Wilson has similarly warned that aircraft shortages will persist for at least four years, citing broader industry challenges such as engine delays, cabin component shortages, and quality control issues.
The aircraft engine market, valued at USD 67.6 billion in 2023, is projected to grow at a CAGR of 8.90% through 2033. However, the market faces headwinds, including high development and maintenance costs, supply chain disruptions, and raw material shortages. These factors are likely to prolong delivery delays and increase operational costs for airlines.
LATAM’s financial performance in 2024 was robust, with a net income of $977 million and total operating revenues of $13 billion, reflecting a 10.6% year-over-year increase. The airline’s adjusted operating margin reached 12.7%, a record for the group. Despite these strong results, Alvo acknowledged that the industry must remain vigilant in navigating ongoing supply chain challenges.
As the aviation sector continues to recover from the pandemic, the persistence of supply chain issues underscores the need for strategic planning and risk management. Airlines like LATAM are closely monitoring developments with OEMs and suppliers to mitigate potential disruptions and ensure operational continuity.
