Global Aerospace Manufacturing Market Outlook to 2028

Global Aerospace Manufacturing Market Overview

• The global aerospace manufacturing market is valued at USD 913 billion, based on a five-year historical analysis. This growth is driven by increasing air passenger traffic, technological advancements in aircraft manufacturing, and significant investments in defense and space exploration. Key factors such as the rise in demand for fuel-efficient aircraft and the expansion of low-cost carriers are also pushing the market forward, while military and defense spending by governments worldwide have strengthened the market further.

• Countries like the United States, France, and China dominate the aerospace manufacturing market due to their advanced manufacturing capabilities, strong research and development (R&D) frameworks, and the presence of leading aerospace companies such as Boeing, Airbus, and Lockheed Martin. The U.S., with its established aviation industry and high defense budget, leads globally, while Chinas growing investments in both civil and military aerospace sectors are positioning it as a dominant player.
• In 2023, new environmental regulations were introduced to limit aviation emissions, with the European Union setting aggressive targets for reducing aviation-related carbon emissions by 2030. These regulations require aerospace manufacturers to develop low-emission engines and integrate sustainable aviation fuel into new aircraft models. The push towards green aviation has accelerated the adoption of hybrid-electric engines and lightweight materials, creating new opportunities for aerospace manufacturers to innovate and meet these regulatory requirements.

Global Aerospace Manufacturing Market Segmentation

• By Product Type: The global aerospace manufacturing market is segmented by product type into commercial aircraft, military aircraft, spacecraft, and general aviation. Commercial aircraft hold the dominant market share in this segment due to the rising demand for air travel and expansion of low-cost carriers across regions such as Asia-Pacific and the Middle East. The robust recovery of international travel post-pandemic and the increasing fleet renewal activities by major airlines are key reasons for the growth of this segment.

• By Region: The aerospace manufacturing market is geographically segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America. North America leads the market, with the U.S. being home to major aerospace manufacturers like Boeing, Lockheed Martin, and Raytheon. The region's dominance is attributed to high defense budgets, significant R&D spending, and its leadership in both civil aviation and military aircraft production.

• By Component Type: The aerospace manufacturing market is also segmented by component type into engines, aerostructures, avionics, landing gear, and interiors. The engines sub-segment holds the largest market share due to the ongoing demand for fuel-efficient engines and advancements in propulsion technology. The push toward sustainability and fuel efficiency has driven companies to invest heavily in advanced engine designs, including hybrid and electric engines, which are pivotal to the future of aerospace innovation.

Global Aerospace Manufacturing Market Competitive Landscape

The global aerospace manufacturing market is dominated by several key players who hold a substantial share due to their technological advancements, global reach, and extensive R&D efforts. The competitive landscape is consolidated, with players focusing on partnerships, mergers, and acquisitions to strengthen their positions. For instance, Boeing and Airbus dominate the commercial aircraft market, while Lockheed Martin and Northrop Grumman lead in the military aerospace segment.

Global Aerospace Manufacturing Industry Analysis

Growth Drivers

• Increase in Air Passenger Traffic: The global air passenger traffic has been on a steady rise, particularly in emerging markets such as India and Southeast Asia. In 2022, global air traffic reached 2.27 billion passengers, according to the International Air Transport Association (IATA). This growth is reflected in the increased demand for commercial aircraft manufacturing, with countries like India seeing domestic air travel recovering to pre-pandemic levels. By 2024, India's domestic air traffic alone is expected to exceed 170 million passengers, indicating a strong demand for new aircraft production to meet this surge.
• Demand for Fuel-Efficient Aircraft: In 2022, rising fuel prices prompted airlines to invest in fuel-efficient aircraft to reduce operational costs. Global jet fuel prices surged to $140 per barrel, creating an urgent demand for modern, fuel-efficient models like the Boeing 787 Dreamliner and Airbus A350, which can save up to 20% more fuel compared to older aircraft. The demand for fuel-efficient planes is expected to rise, with 42% of airline operating costs in 2023 coming from fuel. This has led to increased orders for lightweight, composite-based aircraft.
• Technological Advancements: Technological advancements such as additive manufacturing (3D printing) and the use of composite materials are transforming aerospace production. By 2023, over 18% of aerospace parts were being produced using additive manufacturing techniques, improving efficiency and reducing waste. Composite materials, like carbon fiber, reduce aircraft weight by 30%, leading to increased fuel efficiency and demand for modern aircraft. Aircraft like the Boeing 777X and Airbus A350, which heavily rely on composite materials, have seen increased production in recent years due to these technological innovations.

Market Restraints

• Supply Chain Disruptions: The aerospace industry continues to face significant supply chain disruptions, with delays in the availability of key components like semiconductors and composite materials. In 2022, over 48% of aerospace manufacturers reported supply chain issues affecting production schedules. These disruptions were exacerbated by the global shortage of raw materials and transportation bottlenecks, resulting in delivery delays and backlogs for aircraft orders. By mid-2023, the lead times for essential aerospace parts had increased by 18 months in some cases.
• Stringent Regulatory Standards (FAA, EASA): The aerospace sector is subject to stringent regulatory standards from bodies such as the Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA). In 2023, the FAA implemented new airworthiness directives for commercial aircraft, focusing on environmental sustainability and safety. Compliance with these regulations adds to the production timelines and increases costs for manufacturers. Additionally, the EASA's updated noise and emission standards have posed challenges for aerospace manufacturers, who must integrate new technologies to meet these evolving standards.

Global Aerospace Manufacturing Market Future Outlook

The global aerospace manufacturing market is expected to experience significant growth over the next few years. The market will be driven by several key factors including increased investments in sustainable aviation technologies, the development of electric and hybrid propulsion systems, and growing space exploration programs. Additionally, defense spending is expected to remain high, particularly in North America, Europe, and parts of Asia, contributing to the markets sustained expansion.

Market Opportunities

• Growth in Urban Air Mobility (UAM): Urban Air Mobility (UAM) presents a significant growth opportunity for aerospace manufacturers. In 2023, UAM projects received $4.6 billion in funding globally, with companies like Joby Aviation and Archer Aviation advancing electric vertical takeoff and landing (eVTOL) vehicles. Governments are also developing regulatory frameworks to support UAM integration into urban transportation. By 2024, cities such as Los Angeles and Dubai are expected to see the introduction of pilot UAM programs, which will further drive the demand for aerospace components and technologies.
• Expansion of Emerging Markets (India, Southeast Asia): Emerging markets like India and Southeast Asia are becoming hotspots for aerospace growth. In 2023, Indias government launched a $4.9 billion initiative to boost domestic aircraft manufacturing. With India projected to become the third-largest aviation market by 2025, the demand for aerospace production is surging. Southeast Asian nations, such as Vietnam, are also investing heavily in aviation infrastructure, with $6 billion allocated to airport construction and fleet expansion. This expansion provides lucrative opportunities for aerospace manufacturers to enter new markets.