Military Aircraft Market

Market Overview

The Total Addressable Market (TAM) for Military Aircraft was valued at USD 43.5 billion in 2022. It is projected to reach USD 56.26 billion by 2031, growing at a CAGR of 2.9% during the forecast period (2023-2031).

Countries are working to improve their aerial combat and support capabilities as tensions between various international powers rise. Many countries are modernizing their current military aircraft or replacing their outdated fleet with newer models. With the increase in global defense spending, the industry has recently seen several procurement and development activities for military aircraft. With the rapid advancement of technology, nations are attempting to improve their aerial combat and support capabilities by purchasing next-generation aircraft with cutting-edge features, which need less maintenance and have lower operating costs. In the years to come, this is anticipated to fuel market expansion.

Market Dynamics

Market Drivers

Rising Military Spending Worldwide

The configuration of international security systems has been compromised by the expanding hegemonism, unilateralism, and power politics, which have fueled multiple global crises due to significant changes in the international strategic environment. Territorial rights uncertainty, political unrest, and the military superpowers' drive for global supremacy are a few of the primary factors upsetting the geopolitical situation. The governments' most frequent response is to raise military spending to boost security in their nations. Global military spending was USD 1981 billion in 2020, up 2.6% in real terms from 2019, according to SIPRI.

Military superpowers, including the US, UK, China, and India, have been concentrating on expanding their fleets of military aircraft. Numerous military aircraft development, procurement, and modernization initiatives are now in operation to improve the armed forces' ability to provide aerial assistance. The enormous defense expenditures fund these programs. As a result, the nations with the highest global defense budgets also buy the most military aircraft.

Market Restraints

High Cost of the Platforms Results in Aircraft Leasing

Any purchase or modernization program needs a sizable amount of defense spending. In order to maintain lengthy lead-time improvement initiatives, military procurement efforts must simultaneously develop cutting-edge technologies that can increase dependability and capabilities. Governments must allocate more of their GDP to defense due to the significant expenses associated with modernizing or purchasing newer military aircraft with all required subsystems. The cost of purchasing and maintaining high-tech military aircraft for any armed force will be the highest. Therefore, governments typically emphasize just purchasing the particular aircraft platforms if they are essential, choosing instead to prolong the useful life of the existing old platforms.

The armed services of several nations are increasingly turning to lease military hardware and platforms, such as transport aircraft, tankers, training aircraft, and helicopters, to fill critical operational gaps in the face of the current funding crisis. When nations are creating their domestic alternatives to foreign platforms, leasing can be a cost-effective way for those nations to operate military assets for a short period without significant capital commitment. However, leasing military equipment, such as transport planes, will have an impact on new acquisitions, which will have an impact on the market expansion.

Market Opportunities

Increasing Emphasis on Fleet Replacement and Expansion of Newer Generation Aircraft

Many nations are buying more sophisticated military aircraft to update and enlarge their fleets in response to the rise in international conflicts and political tensions between other nations. By purchasing next-generation aircraft with lower operating costs and maintenance requirements, governments attempt to improve their aerial combat and support capabilities. Many countries continue to use military aircraft that are more than 50 years old. Due to the lack of danger identification and countermeasure systems, these aircraft are susceptible to attacks from enemies. These outdated airplanes are also prone to accidents while in use. This element is also driving the demand for contemporary platforms.

Most developed and developing countries concentrate on a single airframe for diverse aircraft roles, particularly in the unique mission and transport aircraft categories. Fifth-generation fighters, built to be operated with the aid of digital programs and fly-by-wire technologies, are the most technologically advanced jets in the fighter aircraft market. These jets have several advantages over earlier generations of fighter military aircraft, including sophisticated avionics, stealth technology, and super maneuverability, which give them unrivaled capabilities and enable them to dominate the air during combat.

Regional Analysis

The global military aircraft market is divided into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market 

North America is the most significant global military aircraft market shareholder and is expected to grow at a CAGR of 4.45% during the forecast period. With a proposal to purchase 12 new F-15 EX fighter jets from Boeing, the United States Air Force's USD 4.2 billion budget for aircraft acquisition for FY2022 closes a predicted shortfall as the service sells off its outdated F-15C/D fleet. The Air Force requested funding for 48 F-35 fighter jets that Lockheed Martin has produced over the years, with plans to replace the fleet with the updated Block-4 model. Additionally, in April 2021, the US Air Force announced its FY22 budget, which included a request for funding for 48 F-35 aircraft. A significant portion of the USD 825 million was set aside for the upkeep of armament systems and for purchasing spare parts for repairing and operating aircraft. These factors are expected to drive market growth over the forecast period.

Asia-Pacific is expected to grow at a CAGR of 5.95%, generating USD 45.67 billion during the forecast period. China spent the world's second-highest amount on its military in 2020, and it is expected to top USD 252 billion in 2022. This indicates a growth of 1.9% from 2019 and 76% from 2011–2022. As it continues to modernize and reinforce its armed forces, China increased its defense expenditure for FY 2021 by 6.8% compared to FY 2020. In addition, the Indian Air Force emphasizes fleet modernization as it strives to become a powerful air force of the highest caliber, equipped with a full range of capabilities to meet the ever-increasing security challenges and confront various threats. The fighter aircraft squadron of India is losing strength. The Indian Air Force only possessed 31 of the sanctioned 42 fighter aircraft squadrons as of March 2021. But during the forecast period, it is expected to gain strength and boost the market in the Asia-Pacific region.

Europe is expected to grow significantly over the forecast period. Regarding military and security initiatives that would directly affect the UK aerospace industry, Brexit has raised questions about the precise nature of the post-Brexit connections. But the nation's ambitions to replace its fleet of outdated transport and marine patrol planes with cutting-edge aviation systems are still going forward. For instance, in February 2021, the Royal Air Force (RAF) withdrew its fleet of Raytheon Sentinel surveillance planes. The Sentinel R.Mk 1 is a radar reconnaissance variant of the Bombardier Global Express business jet designed to give vital intelligence and target tracking while conducting long-range, extensive battlefield surveillance.

With the start of production at a new plant for the Saab Gripen's aerostructures in July 2020, Brazil formally started producing fighter planes. In 2014, Saab was awarded a contract by the Brazilian government to supply 36 Gripen E/F fighter jets. Additionally, the Forca Aeronaval da Marinha do Brasil received the first H225M helicopter in naval combat configuration from Airbus Helicopters' Brazilian subsidiary Helibras in November 2021. In addition, a synthetic aperture radar (SAR) and inverse SAR (ISAR) capable Telephonics AN/APS-143(V3) Ocean Eye surveillance radar was installed aboard the helicopter. Additionally, it has an EWS IDAS-3 countermeasures system and a Thales Chlio electro-optic turret.

Segmental Analysis

The global military aircraft market is segmented by aircraft type.

On the Basis of Aircraft Type

Based on aircraft type, the global military aircraft market is bifurcated into fixed-wing and rotorcraft.

The fixed-wing segment is the highest contributor to the market and is expected to grow at a CAGR of 4.50% during the forecast period. A heavier-than-air flying machine, such as an airplane that can fly using wings that provide lift due to the aircraft's forward airspeed and the shape of the wings, is known as a fixed-wing aircraft. Rotor and ornithopter-winged aircraft are different from fixed-wing aircraft. Countries have improved their ability to conduct aerial combat as tensions between various international nations have risen. Many countries have replaced outdated fighter jet fleets with more modern, higher-tech aircraft or updated their current models. In the past several years, the sector has seen extensive procurement and development operations for fighter jets due to the increase in defense spending by several countries worldwide.

The new aircraft would reportedly fly at subsonic speeds and have an operational range of roughly 12,000 kilometers. The new aircraft will reportedly be capable of transporting payloads weighing between 30 and 40 tonnes. We anticipate that some of Russia's latest air-launched hypersonic missiles, including the Kh-47M2 Kinzhal and Kh-95, will be mounted aboard the new bomber aircraft. Russia's fleet of Tu-160M2 supersonic strategic bombers is still being upgraded. By 2030, it's anticipated that Russia's entire new Tu-160M2 fleet of 50 aircraft will have been delivered. Additionally, Russia is modernizing its arsenal of long-range strategic and maritime strike bombers, the Tu-22M3. In total, Russia intends to upgrade 20 of these kinds of aircraft.

A heavier-than-air aircraft having revolving wings or rotor blades that provide lift by spinning around a vertical mast is referred to as rotorcraft or rotary-wing aircraft. Combat or assault helicopters are armed helicopters having the offensive capability of engaging ground targets, including enemy infantry, military vehicles, and fortifications. A rotor is a group of rotor blades mounted on a single mast. They are sometimes referred to as helicopter gunships due to their strong armaments. In the 2015 agreement, Boeing delivered the last five of the 22 Apache attack helicopters to the Indian Air Force in 2020. The US Army and other clients worldwide have purchased aero-structures for the AH-64 Apache helicopter from Boeing's Hyderabad joint venture, Tata Boeing Aerospace Limited (TBAL).

Recent Developments

• February 2022- Indonesia had decided to purchase six Rafale combat jets from French manufacturer Dassault Aviation, the French government revealed. Indonesia would spend USD 8.1 billion to purchase 42 Rafale combat jets.
• November 2021- The Indonesian Ministry of Defense ordered two Airbus A400M aircraft in multirole tanker and transport configuration. The agreement, which went into force in 2022, will increase the number of A400M operators to ten countries.