Air Traffic Management Systems Market

Market Overview

The global air traffic management systems market share is expected to show significant growth with a  CAGR of 4.2% during the forecast period.

The air traffic management system tracks and controls the aircraft movements from its departure till the landing. The term air traffic management encompasses all systems that assist the aircraft to depart from an airport, transit airspace and land at a destination airport.  It also involves air traffic services (ATS), airspace management (ASM), air traffic flow management (ATSM), and air traffic capacity management (ATFCM). An interconnected and well-organized control system allows an aircraft to operate with the minimum of performance change from one airspace to another.

Air traffic management systems differ in each state, concentrating on specific regional requirements; thus, maintaining different levels of service and capabilities around the world. Many Air Navigation Service Providers (ANSPs) does not provide an air traffic control service that matches the capabilities of modern aircraft. Therefore, in order to coordinate the global planning of technology upgrades, Aviation System Block Upgrade (ASBU) initiative has been developed. A safe and efficient air traffic management system is necessary to combat the increasing demand and complexity of air traffic. It is a very dynamically changing field that involves new techniques, innovative procedures, and legal scenarios. Air navigation service providers offer specific training to air traffic controllers to facilitate safety and efficiency in aviation. The training outlines the basic technical systems, such as communication, navigation, and surveillance. In addition to this, the training enables the attendees to understand air traffic control procedures and operations, including radar separation and low visibility operations, as well as the air traffic service, such as flight plan data processing and flow management.

Market Dynamics

What Prompts the Need for An Efficient Air Traffic Management System?

An efficient air traffic management is required to fulfill three major objectives, namely to enhance the passenger experience, maximize revenue opportunities, and optimize operational efficiencies. The companies strive to provide better services to customers by providing a smooth flight. Situations such as delayed flights and cancellation due to a busy route or an airport terminal are not well received by customers. Air traffic is anticipated to be doubled by 2035; therefore, European airlines have come up with Iris, a flight simulation software. It is designed to deliver game-changing operational benefits to airlines.

Inflight Connectivity

Inflight connectivity help airlines to improve operating margins considerably. It has provided various new revenue streams and cost-cutting options. The wireless broadband connectivity and dependent services are predicted to deliver an extra USD 30 billion in revenue to airlines every year by 2035. Better connectivity facilitates effortless maintenance, improved turnaround time, and reduced fuel costs via real-time weather information. Technological advancements have set new standards for operational and safety communications. Optimized flight and other efficiencies collectively yield 2-3% fuel savings per flight. Furthermore, better connectivity made airlines more attractive and responsive, resulting in an improved host-customer relationship. 5G, in tandem with the Internet of Things, will deliver embedded sensors in aircraft. AI in aviation is expected to reach USD 2.2 billion by 2025. It is set to achieve operational efficiency, which includes predictive maintenance, the use of AI to create better insights, sophisticated services, such as chatbots offering assistance, and improved translation technology. Virgin Australia has launched voice check-in through Amazon Alexa, and United Airlines through Google Assistant.

Inflight Wi-Fi is seen as a luxurious facility provided to the passengers. Some airlines are utilizing available L-band data connections as it is an easy way of enabling operational broadband connectivity. Airlines are more resilient with secure broadband connectivity that accelerates their access to digital aircraft operations, meaning faster access to operational savings.

The Emergence of Unmanned Aerial Vehicle Commercialization

Growing advancements in communication and data processing technologies have accelerated the demand for air traffic management systems. Alarming aerospace congestion, demand for air traffic infrastructure reliability, and the modernization of airports are bolstering the air traffic management market. Furthermore, the commercialization of unmanned aerial vehicles (UAVs), drones, and hybrid aircraft necessitate a developed ATM infrastructure. The Paucity of the workforce and rising cyber-attacks are expected to obstruct the market growth during the forecast period. However, the installation of advanced equipment across the world and the development of microelectronics for air traffic management offer lucrative growth opportunities to the market players.

Regional Analysis

Asia-Pacific’s Low Flight Fares

Asia-Pacific is expected to dominate the market during the forecast period, owing to the rise in the passenger traffic coupled with rising affordability and low flight fares. The air passenger traffic grew by 8% and air cargo grew by over 4.5% in 2018 as compared to 2017, according to the Association of Asia Pacific Airlines (AAPA). A growing number of airport investments in countries such as Australia, China, India, Vietnam, and Indonesia also contributed to the increasing passenger traffic and cargo movement in the region. Rebuilding the regional connectivity and infrastructure development of the existing airports to accommodate the growing passenger and cargo movements are expected to boost the market during the forecast period.

North America’s Modernization of Airport Infrastructure

North America holds significant market share due to the presence of multiple air traffic management system providers. Existing airport modernization activities in the U.S. and Canada are anticipated to augment market growth. The U.S. is currently underway up-gradation of six airports, namely Boston, Denver, Texas, Chicago, Louisiana, and Tennessee. Further, technological progression and rising automation will enhance the regional air traffic management market.

Single European Sky Program

Europe is expected to be the fastest-growing market due to increased brownfield airport investments. as well as the Single European Sky program, which is likely to engender modernization into the existing ATM system.

Segmental Analysis

Revamping of Airports to Boost Hardware Segment’s Growth 

The hardware segment is expected to dominate the market during the forecast period as the entire air traffic management procedure relies on the hardware that collects real-time information, transmits data, and maintains a streamlined flow of air traffic on both the ground and in the air. Hardware system is required for carrying out various operations, such as navigation, communication, and surveillance. The technological advancements in the hardware sector will enhance user safety and experience. Revamping existing airports and construction of new airports fuelled the demand for air traffic management hardware components worldwide. Indonesia and Australia are planning to bring forth new airports by 2025, which will further prompt the requirements of ATM systems in these regions. The software segment, on the other hand, is expected to show significant growth during the forecast period on account of its ensured safety and simplification of air travel. Innovative and nanotechnology-based software are likely to downplay human efforts, as well as reduce operational errors to a great extent.

Communication Segment’s Contribution to the Military Sector

In terms of system, the communication segment will continue to be the largest shareholder as it plays a vital role in guiding the pilots on distance, height, and time of approach. It is also anticipated to significantly contribute to the military sector.

Recent Developments

• The U.S. Air Force awarded USD 59 million to Northrop Grumman for the development and manufacture of the embedded global positioning system (GPS) in February 2019
• In 2019, Lockheed Martin was selected by the Federal Aviation Administration (FAA) to provide En Route Automation Modernization (ERAM) as a prime contractor to design and develop critical flight and surveillance data processing subsystems.
• The U.S. Army has signed a contract with Harris Corporation to provide wideband satellite communications in December 2018. Under this contract, the U.S. army will be supported with mission-critical communication by Wideband Satellite Communications Operations and Technical Support II (WSOTS-2)
• Indra Sistemas signed an agreement to provide InNOVA Approach and Tower display surveillance data processing system to the Inverness Airport in October 2018. The company operates in more than 10 airports in Scotland
• Honeywell announced its collaboration with the Airport Authority of India (AAI), in June 2018, to upgrade the air traffic management system with voice recognition system across the region
• Indra Sistemas signed a contract with AirNav Indonesia to revamp three-air control centers in Indonesia in August 2017