Aerospace and Defense Market Research Services

After a challenging year in 2020, global aerospace and defense (A&D), industry revenue is expected in 2021 to start to recover. This recovery will be uneven in both commercial and defense. The COVID-19 pandemic has had a significant impact on the commercial aerospace sector. This has resulted in a drastic drop in passenger traffic which in turn has affected aircraft demand. The COVID-19 pandemic has caused a significant decline in passenger traffic, which will slow down the recovery of the commercial aerospace industry. Travel demand is unlikely to return to pre-COVID-19 levels until 2024. As most countries continue to maintain their military capabilities and have not reduced their defense budgets, the defense sector should remain stable in 2021. Some defense programs may see minor schedule delays and cost increases in 2021 due to disruptions in the global supply chain.

Despite many downturns, commercial aviation has always been resilient and has returned to its long-term growth rate at approximately 5 percent annually. Despite the uncertainty, passenger traffic in 2011 rose by 6 percent over 2010 levels. This trend is expected to continue for the next 20-years, with global passenger traffic increasing by about 5 percent per year. The growth of emerging markets will also increase the need for efficient goods transport. Air cargo is expected to grow by approximately 5 percent per year through 2031. Boeing projects a long-term need for 34,000 new planes in the next 20 years. This is valued at approximately $4 trillion. These new planes will replace old, less-efficient aircraft. This will benefit passengers and airlines as well as stimulate growth in emerging markets. Around 23,240 single-aisle planes will make up 68% of all new deliveries. This is a reflection of growth in emerging markets such as China and the expansion of low-cost carriers around the globe. Twin-aisle will grow from a 19% share of the fleet today to a 23% share by 2031. With the addition of 7,950 twin-aisle aircraft, airlines will be able to expand into new international markets. Airbus predicts that Latin American airline traffic will increase by more than 6 percent per annum over the next 20-years, which is the second-highest rate of growth in the world, after the Middle East, and ahead of Asia Pacific. The region’s overall traffic is expected to triple in the next 20 years. India 2012 was the tenth anniversary of full-fledged private sector participation in defense production. It received 100% equity and 26% of foreign direct investment.

The 2008 financial crisis has caused austerity measures in the defense sector and budget cuts throughout the west. The rise of the rest, particularly emerging economies such as China, India, and Brazil, has caused a significant shift in the global defense industrial sector. Unexpected changes caused by the financial crisis, along with the changes in defense technology and changing nature of war have impacted the global defense market and industry. Budget constraints have resulted in lower demand, which means that conventional weapon manufacturers will see fewer growth opportunities in the future. Companies that are willing to take risks and invest in new sectors such as cyber security, unmanned system, and C4ISR have a lot of opportunities. With embedded systems, computers, and communication technology, the dominant contractor has become system integrators. 

Defense research has lagged behind civilian counterparts for the first time, opening the door to technology adaptation for commercial applications. System integrators must be looking for viable COTS technology to avoid duplication of R&D and lower product prices. The future of defense spending will see a significant increase in value-for-money and the provision of innovative and competitive support services. These changes will result in increased mergers and acquisitions, joint development, and joint production through alliances, licensing and technology transfer agreements, and other forms of cooperation at governmental, institutional, and organizational levels on a national as well as international scale. Companies that want to succeed must be proactive in understanding and reading the market. They should also be informed about industry developments. They should also be able to adapt to changing business environments and develop effective strategies for growth.

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