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The aerospace industry is one of the most important and dynamic sectors of the global economy. The sector is characterised by growth at a high rate and a wide range of opportunities for investment. The technological progress, which is one of the key drivers of the aerospace market, has been accompanied by changes in consumer preferences, which have also affected consumers' purchasing behaviour.
With regard to market growth, it is expected to reach USD 994.6 billion by 2025, according to a new study by Grand View Research, Inc. The growth of the global aerospace industry will be driven by rising demand for aircraft and an increasing number of air passengers.
The global aerospace industry consists of manufacturers who design and develop aircraft and related products, as well as manufacturers who produce them. This article will focus on the major trends that affect this industry and its future prospects.
The major trends that affect this industry and its future prospects
The application of advanced technologies and increasing government funding in R&D activities are other major factors contributing to the growth of this market. Moreover, an increasing number of mergers and acquisitions among leading players is also expected to have a positive impact on the overall market size over the forecast period.
On the basis of product type, the global aerospace market has been segmented into engines, aircraft structures & systems, avionics & electrical equipment, components & parts, airport ground support equipment and others (including air traffic management systems). In 2017, aircraft structures & systems accounted for the largest share of total revenue share in the global aerospace market owing to increasing demand from airlines for new aircraft.
Based on application type, the aerospace industry has been segmented into commercial aviation (airlines), military aviation (defence) and space exploration (government). In 2017, commercial aviation accounted for the largest share of total revenue due to growing demand from airlines for new aeroplanes such as wide-body jets or narrow-body jets with more passenger capacity.
Technological advances: Technological advances can have a significant impact on the future growth of an industry if they improve efficiency or lower costs. For example, in the case of civil aviation, newer technologies such as biofuel or hybrid engines help reduce fuel consumption by up to 30% compared with conventional fuel while reducing greenhouse gas emissions by 50%. This helps airlines reduce their costs while improving their environmental sustainability credentials at the same time.
Ageing fleet: Many airlines around the world have ageing fleets that need replacing or upgrading with newer models. This creates demand for new aircraft as well as spare parts and maintenance services for existing planes. For example, Boeing forecasts that by 2031 there will be more than 30 million flights per year with more than 1 million passengers each year flying on aeroplanes that were built before 2000 (and which need replacement).
Electric propulsion will become the key technology for future aviation developments. Currently, there are several types of electric propulsion systems being developed for commercial aircraft including hybrid systems combining both electric and traditional combustion engines or pure electric aircraft powered by batteries or fuel cells which could significantly reduce CO2 emissions compared to today’s aircraft (which emit about 900 kg per seat per year). These innovations could also help decrease noise pollution from airports as well as reduce costs for airlines due to lower fuel consumption.
Increasing trade between countries. Increased trade between countries has led to greater opportunities for exports of various goods, including aircraft parts and engines. As more countries become involved in international trade, more businesses are expected to invest in manufacturing facilities overseas to meet their production needs.
Aircraft production capacity. Technological innovations in aircraft design have made it possible to increase their capacity while reducing their weight, which has led to an increase in fuel efficiency by up to 80%. In addition, technological advances have increased safety and reduced costs for airlines as well as passengers. This has led to increased demand for air transport services across all regions around the world., leading to higher demand for aircraft.
Key Takeaways
The aerospace industry is expected to be one of the key drivers of global economic growth over the next decade. The industry is highly fragmented, with a large number of small and medium-sized enterprises (SMEs), and it has been relatively shielded from the effects of the recent global economic downturn.
The aerospace industry is a key sector for developing countries, as it can contribute to increased industrialisation and technological innovation, leading to job creation and higher incomes. In addition, it can help foster international trade by providing more efficient transport systems that reduce travel costs and increase productivity.
In order to capitalise on these potential benefits, developing countries need to strengthen their domestic aerospace capabilities through research and development (R&D) spending, human capital development and technological innovation — including through partnerships with foreign partners — so that they can compete effectively in this growing market.