Market Trends of Aerospace Materials Industry
The Demand for General and Commercial Aircraft is Increasing
- General and commercial aircraft are used for various purposes, including civil aviation (both private and commercial) and passenger and freight transportation.
- The aerospace industry is experiencing stagnant growth owing to the strengthening of passenger travel demand. The backlog of new aircraft orders and the constant resurgence of business aircraft may further contribute to its growth.
- Demand for private travel has increased as the number of high- and ultra-high-net-worth individuals has increased globally, resulting in the procurement of helicopters and business jets with improved cabin interiors.
- According to IATA (International Air Transport Association), the annual growth of global air traffic in 2023 increased by 36.9% in 2022.
- The aerospace industry is undergoing rapid technological advancements and innovation, creating upswings for aircraft manufacturing industries. According to the Boeing Commercial Outlook 2023-2042, with a resurgence in international traffic and domestic air travel back to pre-pandemic levels, the company has projected global demand for 48,575 new commercial jets by 2042.
- China is one of the largest aircraft manufacturers and one of the largest markets for domestic air passengers. Moreover, the country's aircraft parts and assembly manufacturing sector has been increasing, with over 200 small aircraft parts manufacturers.
- As per IBEF (India Brand Equity Foundation) and IATA forecasts, India's aviation market is expected to be the world's third-largest by 2024. The aviation sector has witnessed various investments and developments in recent times. For instance, in January 2022, Tata Sons acquired 100% shares of the state-run Air India by offering INR 18,000 crore (USD 2.4 billion). In June 2024, the National Company Law Tribunal (NCLT) approved the merger of Air India and Vistara to form the largest international carrier in India.
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North America is Expected to Dominate the Market
- North America is expected to dominate the market due to increasing demand from countries like the United States and Canada.
- The United States has the largest aviation market in North America and one of the world's largest fleet sizes. Strong exports of aerospace components to countries such as France, China, and Germany, along with robust consumer spending in the United States, have been driving the aerospace industry's manufacturing activities, which is expected to induce a positive momentum for the country's aerospace material market.
- From 2022 to 2023, the amount of money the United States government allocated for defense rose by USD 55 billion, partly because of extra military assistance provided to back Ukraine during its continuous battle. The United States allocates more funds to defense than the next eight nations. Also, the United States government has signed the Fiscal 2023 National Defense Authorization Act into law, allotting USD 816.7 billion to the Department of Defense.
- The General Aviation Manufacturers Association (GAMA) announced that business aircraft manufacturers had a strong performance in the third quarter of 2023. In addition, the United States manufacturers saw an increase in production, delivering 512 aircraft in Q3 2023, a rise from 473 in the previous quarter, marking an 8.2% growth. This represents 70% of the total global shipments in the third quarter.
- According to the Aerospace Industries Association of Canada (AIAC), the aerospace industry generates CAD 31 billion (USD 23 billion) in annual revenue. Approximately 80% of Canada's aerospace industry is civil-oriented, and 20% is military-oriented.
- Montréal is the world's third-largest aerospace hub after Seattle, Washington, and Toulouse, France. Aerospace leads the Canadian manufacturing sector in innovation-related investment, with an annual expenditure of over USD 1.4 billion on R&D activities.
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