IATA, CFM renew agreement to ease engine maintenance bottlenecks as supply chain crisis deepens

January 21, 2026 in Business, Companies, Travel & Tourism by Editor

IATA and CFM International have renewed a pro-competitive agreement aimed at opening up aircraft engine maintenance markets, easing supply chain bottlenecks and reducing soaring maintenance costs for airlines as thousands of aircraft remain grounded worldwide.

The International Air Transport Association (IATA) has renewed a landmark pro-competitive agreement with aircraft engine manufacturer CFM International, extending measures designed to open up the engine maintenance market and ease mounting cost and capacity pressures facing airlines worldwide.

The agreement, which now runs through February 2033, is aimed at strengthening competition among third-party providers of aircraft engine parts and maintenance, repair and overhaul (MRO) services for CFM-manufactured engines. CFM International is a 50/50 joint venture between GE Aerospace and Safran Aircraft Engines and is one of the world’s most influential engine makers.

The renewal comes at a critical moment for the aviation industry, which is grappling with a prolonged global supply chain crisis that has disrupted aircraft deliveries, grounded thousands of jets and sharply driven up maintenance and leasing costs. More than 25,000 CFM engines are currently in active service globally, powering aircraft operated by over 602 airlines and operators. These engines are widely used on Boeing 737 aircraft, much of the Airbus A320 family, and all Airbus A340-300 long-haul aircraft, making their availability and maintenance central to global air transport.

IATA has been increasingly vocal about the scale of the supply chain disruption. In recent assessments, the airlines lobby estimated that carriers are facing a shortfall of approximately 5,300 new aircraft deliveries, while an additional 5,000 aircraft remain grounded due to shortages of spare parts or limited access to MRO capacity. The cumulative impact of these constraints, IATA says, cost the airline industry more than USD 11 billion in 2025 alone.

Engine availability has emerged as one of the most acute pain points for the industry. According to a recent IATA study, restrictive aftermarket practices combined with supply chain bottlenecks added an estimated USD 5.7 billion to engine leasing and maintenance costs for airlines in 2025. These pressures have constrained airline schedules, reduced fleet utilisation and delayed capacity restoration even as passenger demand continues to recover.

It is against this backdrop that IATA and CFM’s renewed agreement takes on added significance. First signed in 2019, the agreement introduced a set of conduct policies intended to give airlines greater flexibility in how they maintain their engines and where they source parts. The renewal reinforces those commitments and extends their application to all CFM commercial engines, including the widely used CFM56 engine family as well as the newer LEAP engines.

Speaking in Geneva, IATA Director General Willie Walsh said airlines have long struggled with aftermarket business practices that limit competition and inflate costs. He noted that these pressures have intensified as maintenance capacity has tightened and supply chain disruptions have worsened.

Walsh described the agreement as timely, stressing that while it is not a cure-all, it offers practical and pro-competitive measures that are essential for the long-term health of the aviation industry. He added that if applied to its full potential, the agreement could provide much-needed short-term relief by expanding maintenance capacity and helping airlines meet customer demand amid ongoing supply chain failures. Walsh commended CFM for taking the lead on reform and urged other manufacturers to follow suit.

From CFM’s perspective, the agreement underscores a strategic commitment to maintaining an open and competitive aftermarket ecosystem. CFM President and CEO Gaël Méheust said the extension reaffirms the company’s belief that competition among maintenance providers ultimately lowers costs and expands choice for airline customers.

Méheust pointed out that CFM pioneered an open MRO model with its CFM56 engines, where nearly 40 independent shops compete for overhaul work, with CFM itself accounting for only about a third of total overhauls. That same model, he said, is now being applied to LEAP engines, where six premier MRO providers and more than a dozen licensed shops are already competing in the market.

Despite persistent supply chain constraints, Méheust said CFM remains focused on placing customers at the centre of its operations. He added that in 2026 the company plans to intensify efforts to ensure customer satisfaction with both its products and support services, even as industry-wide pressures persist.

In practical terms, the agreement gives airlines and MRO providers greater freedom to maintain CFM engines using approved third-party parts and repairs. Airlines are allowed continued access to CFM technical manuals and repair instructions even when engines contain non-CFM components, reducing dependence on original equipment manufacturer supply chains that are currently under strain.

The agreement also provides clearer protections for warranty coverage, ensuring that claims are assessed based on the actual cause of a problem rather than penalising airlines for sourcing alternative parts or repairs. This has been a longstanding concern among operators, who argue that fear of warranty disputes often discourages the use of approved aftermarket solutions.

By enabling independent MRO providers to compete more freely for engine work, the agreement is expected to expand effective maintenance capacity, reduce backlogs and shorten aircraft downtime. It also confirms continued access to alternatives when original equipment supply chains are constrained, helping airlines keep aircraft flying rather than parked.

To support market transparency and dispute resolution, the agreement maintains the role of a CFM liaison officer and an independent trustee, providing channels for airlines, lessors and MRO providers to raise concerns and seek solutions.

The beneficiaries extend beyond airlines. Aircraft lessors, third-party MRO facilities and parts manufacturers also stand to gain from a more competitive aftermarket, potentially easing pressure across the aviation value chain.

For IATA, the renewed agreement forms part of a broader campaign to address structural weaknesses exposed by the supply chain crisis. The association has repeatedly called on aircraft and engine manufacturers to relax tight controls over spare parts distribution and technical data, arguing that a more open aftermarket is essential to restoring resilience and affordability in global aviation.

As airlines continue to navigate constrained capacity, rising costs and fragile recovery dynamics, the extension of the IATA-CFM agreement signals a rare example of alignment between manufacturers and operators. Whether similar reforms are embraced across the industry may help determine how quickly aviation emerges from one of the most disruptive supply chain crises in its history.