Military Aircraft Market Is Estimated To Witness High Growth Owing To Rise In Defense Budgets
Market Overview:
The military aircraft market comprises fixed-wing and rotary-wing aircrafts used for warfare missions and transportation. Military jets are usually designed for roles like air defense, strike, and airlift. Military aircraft feature advanced technologies like stealth, fly-by-wire control systems, radar-absorbent coatings, and precision-guided weapons integration. They provide strategic mobility and power projection capabilities essential for national defense.
Market key trends:
The demand for military aircraft is anticipated to increase with rising global defense budgets. According to the Stockholm International Peace Research Institute, global defense expenditure reached an estimated US$ 2 trillion in 2020. Countries are upgrading their aging fleets and procuring new aircraft to modernize their air force capabilities. Ongoing geopolitical tensions and territorial conflicts are prompting nations to strengthen their militaries. Additionally, the development of 5th generation aircraft like the F-35 is likely to define the future of air combat. Their advanced sensors, networked avionics, and stealth will ensure air supremacy for decades to come.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate due to the presence of large established players and high initial investment required for research, development and manufacturing facilities.
Bargaining power of buyers: The bargaining power of buyers is moderate since aircraft manufacturers have a range of options and switching costs are low. However, stringent requirements limit options.
Bargaining power of suppliers: The bargaining power of suppliers is low as aircraft manufacturers source from a large global supply chain and no supplier accounts for a major share of requirements.
Threat of new substitutes: The threat of substitutes is low due to lack of alternatives offering the performance required for military applications.
Competitive rivalry: Competition within the military aircraft manufacturing industry is intense.
SWOT Analysis
Strengths: Advanced technology, large scale facilities, long standing relationships with defence organizations, global footprint.
Weaknesses: High R&D costs, vulnerability to defense budget cuts, dependency on large contracts.
Opportunities: Growth in defense expenditure of emerging economies, demand for upgrades and modernization, demand for new generation aircraft.
Threats: Geopolitical tensions, price pressures from clients, regulations around exports.
Key Takeaways
The global Military Aircraft Market Demand is expected to witness high growth, exhibiting CAGR of 5.4% over the forecast period, due to increasing defense budgets of major economies and geopolitical risks. Countries are opting to replace ageing fleets and purchase new aircraft to strengthen their military capabilities.
The North American region currently dominates the military aircraft market owing to large defense allocations by the US and presence of leading OEMs such as Lockheed Martin and Boeing. However, the Asia Pacific region is anticipated to be the fastest growing market, driven by rising procurement by China and India to modernize their armed forces.
Key players operating in the military aircraft market include Lockheed Martin Corporation, The Boeing Company, Northrop Grumman Corporation, Saab AB, BAE Systems PLC, Rostec, Aviation Industry Corporation of China, Korea Aerospace Industries Ltd, Mitsubishi Heavy Industries Ltd, Leonardo SpA, Textron Inc., Airbus SE, Dassault Aviation SA, and Piper Aircraft Inc. Major manufacturers are focused on developing new technologically advanced aircraft as well as upgrading existing fleets to gain contracts from defense organizations globally.
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