The global aerospace parts manufacturing market size was valued at USD 754 billion in 2021 and is expected to grow at USD 1130 billion by 2030. The market is expected to grow at a CAGR of 5% during the forecast period (2022–2030).
The aerospace industry is continuously evolving to cater to the demands of the passengers. With an increasing number of passengers every year, the aerospace industry needs to develop new aircraft and airport facilities to make their passenger’s traveling experience more convenient, fast, and luxurious. With the high demands from its service consumers, the aerospace industry is continuously evolving its aircraft with a lot of new accessories and services that will enable the passenger to have a safe and better traveling experience. The aircraft need to be refurbished or a complete new-age aircraft to be manufactured to make this happen. For this, various parts are manufactured to cater to the new-age demands of passengers, which is driving the aerospace parts manufacturing industry.
|Market Size||USD 1130 billion by 2030|
|Fastest Growing Market||Europe|
|Largest Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
The rise in passenger traffic, especially in Asia-Pacific and the Middle East, is driving the demand and production of the next-generation aircraft. This can be a positive thing for the industry, as it has shown a slight recovery in aircraft production and led to the rise in aerospace parts manufacturing. The passenger and freight traffic is likely to grow at an exceptional rate in the coming ten years, so the need to manufacture high-end next-generation aircraft is the talk of the town.
Apart from this, the number of passengers flying increases by 10 to 15% per year and is anticipated to increase further. Another reason driving more passengers to fly is the affordable ticket prices, the frequency of the flights, and the availability of flights to every major location. For all these reasons, it is the need of the hour for aircraft manufacturers to develop a new-age aircraft that will cater to the needs of increasing passenger numbers. This is why the aerospace parts manufacturing market has been booming at an exceptional rate for the past few years, as such parts are crucial while refurbishing an aircraft or even manufacturing a whole new aircraft.
Along with this, major aircraft manufacturers like Boeing and Airbus have announced to increase their production rate amid the increase in passengers and match their expectations, which is proving to be the driving factor for the aerospace parts manufacturing market growth.
Aviation is a carbon-intensive field and one of the fastest-growing sectors in terms of greenhouse emissions. The increase in the demand for air transportation and decreasing marginal fuel efficiency put extra pressure on the aerospace industry to reduce greenhouse emissions. The possibility of hefty taxes imposed on the airlines encourages them to replace their aging aircraft with the new-age and fuel-efficient aircraft. With the massive technological advancements over the past few years, the aircraft industry has been forced to replace the old fleet with a more superior performance aircraft.
A typical aircraft remains in service for two or three decades, but the costs incurred to retain and operate such aircraft exceed the profit generated through such aircraft; hence they must be replaced at once within a stipulated time. The annual replacement rate of an aircraft is about 3% and will increase in the coming years. When it comes to the replacement of an aircraft or the need for refurbishment arises, new parts are manufactured, and this is a key driving factor for the aerospace parts manufacturing market growth.
Any manufacturer is dependent on the availability and accessibility of the raw materials, sub-assemblies, and crucial parts from subcontractors and suppliers. The key raw materials required for manufacturing an aircraft include steel, titanium sheets, composites including carbon and boron, and aluminum sheets, plates, forgings, etc. The ability to deliver products and services to customers is highly dependent on financial stability and the performance of the suppliers and sub-contractors based on the availability of the raw materials and other components. Suppose a supplier or a raw material manufacturer faces any financial problems and cannot deliver the materials on time. In that case, it will hamper the overall supply chain, which will have a negative impact on the entire process. This is where the costs incurred for any parts or raw materials get increased with a small financial problem at the supplier’s end, which caters as the origin of the increased prices. This is what creates a restraint for the aerospace parts manufacturing agencies and proves to be an obstacle to the market growth.
Major emerging economies with increased per capita income play a vital role in driving the aerospace parts manufacturing market share as the increased per capita income has led to an increase in the passenger count. The number of passengers traveling by aircraft has subsequently increased and is expected to increase further in the coming years. With the increase in the passenger count, it is pretty clear that the demands of passengers have increased in terms of airline services.
The aircraft manufacturing industries are forced to manufacture new-age aircraft to satisfy the passenger’s demand for convenience and better transport. To cater to these demands, aircraft manufacturers are trying to innovate and create an evolution in the aircraft industry. This dreamed innovation and evolution needs a subtle investment in parts and components manufacturing, as in the end, the key parts and components bind together to form an entire aircraft. This is why the need for aerospace parts has suddenly increased in the global market, which is creating huge opportunities for manufacturers and suppliers of aerospace parts.
The global aerospace parts manufacturing market share is primarily segmented into four regions: North America, Europe, Asia-Pacific, and Middle East & Africa. The North America region is dominating the global market with a market value of USD 411 billion in 2021 and is expected to reach USD 522 billion by 2030 with a CAGR of 3%. North America is the most favorable region for the growth of the aerospace parts manufacturing market, as maximum air transport happens in the North American region. This is why North America is the most dominant region of all the regions worldwide.
After North America, Europe is the second most dominating region, valued at USD 255 billion in 2021, and is expected to reach USD 420 billion by 2030 at a CAGR of 6%. Europe has a significant growth rate of 6%, which is more than North America. The reason behind this is the industrial infrastructure the region has. Europe is known as the world's automotive hub, which boosts every industrial segment operating in the region, and the market for aerospace parts manufacturing is no different from that.
Other regions, which include Asia-Pacific and, the Middle East & Africa, also contribute with a significant market share which stands at USD 141 billion for Asia-Pacific in 2021 and is anticipated to reach the figures of USD 270 billion by 2030 at a CAGR of 8%, which is the highest growth rate estimated. The Middle East & Africa region has the least market value considering the above three regions, which had a market share of USD 9 billion in 2021, reaching USD 14 billion by 2030 at a CAGR of 5%.
The aerospace parts manufacturing market share is segmented based on product and type. By product, the market is segmented into engines, aircraft manufacturing, and insulation components manufacturing. The aircraft manufacturing segment dominates the market with an estimated revenue generation of USD 602 billion by 2030 with a CAGR of 4%.
The aircraft manufacturing industries constantly need essential parts and components required to manufacture an aircraft with full-fledged facilities embedded with the latest technology. To make this happen, there is a continuous need for the key parts and components to be utilized in the aircraft for the smooth and effective functioning of every aircraft component. This is why the aerospace parts manufacturing units are finding these aircraft manufacturing industries as one of the key segments from where they can generate whopping revenue figures.
Followed by the aircraft manufacturing industries, the second-most dominating category is the engine division, which had a significant contribution to the global market with USD 177 billion in 2021 and is expected to grow to USD 259 billion in 2030 at a CAGR of 4%. Engines are the key component of any machine, and aircraft being a huge machine operating with a high-speed and high-power engine, needs the engine to be the most strong and properly functioning component.
Engine manufacturing requires assemblies of many small parts and accessories that cater to the smooth running of an engine. This is why the engine parts are crucial and are in high demand for engine manufacturing units, owing to a substantial market share. Insulation components contribute to its part with a sales figure of USD 22 billion in 2021 and growing to USD 38 billion in 2030 at a CAGR of 6%. This category has the highest growth rate, which is anticipated till 2030. The insulation components are needed for the chamber where the heat from the moving parts of the aircraft cannot enter the aircraft.
By type, the market is categorized into commercial, business, and military aircraft. Out of which, commercial aircraft is the dominating segment with figures of USD 419 billion in 2021 and is expected to grow to USD 660 billion in 2030 at a CAGR of 5%. The commercial aircraft demand is said to touch the all-time high demand with passenger and freight traffic increase. Along with this, there is an increase in the demand for cargo services, proving to be one of the driving factors for the aerospace parts manufacturing market. The military aircraft segment is the second most dominant category, contributing revenue of USD 223 billion in 2021 and anticipated to reach USD 304 billion by 2030 at a CAGR of 4%. Military aircraft are different from commercial or business aircraft as it differs in design, quality, and functionalities. The business aircraft category is the third major revenue generator with an estimated market share to grow at USD 162 billion by 2030 at a CAGR of 5% from early figures of 2021, which stands at USD 162 billion.
The outburst of the Covid-19 pandemic had an adverse effect on the aviation industry with the travel restrictions imposed all over the world. The imposed lockdown led to the shutdown of major operations that earn business. With the preventive measures and the lockdown, people were restricted from getting out of their homes, so it was evident that flight travel was not even an option. This led the aviation industry to huge losses as there was no option from where revenue could be generated as all the passengers, and commercial flights were on the standby mode.
With this, the entire aviation industry, including the aerospace parts manufacturing industry, came to a sudden halt with no passengers. The flights were not allowed to take off for more than six months in some regions, and in countries like India and China, the said period was near about a year. International flights were completely banned to prevent the spread of the disease, which led the global aviation industry to fall back to the lowest figures in its history. The entire revenue generation model of the aviation industry was stopped and made to carry huge debts for the majority of the airlines operating around the world.