The defense aircraft materials market is anticipated to register a CAGR of over 5% during the forecast period.
- The global military expenditure experienced solid growth over the last decade to reach USD 1.92 trillion in 2019. A large portion of the enhanced defense expenditure is directed toward the procurement of new generation military aircraft, both, combat and non-combat, thereby encouraging research and development (R&D) toward new materials, mainly for producing the different aircraft types and configurations.
- Emerging fabrication technologies and manufacturing processes are envisioned to improve the current properties of the military aircraft materials and foster the impetus for developing new alloys for manufacturing high-performing aircraft parts and airframe structures.
Key Market Trends
Combat Aircraft Segment to Dominate the Market During the Forecast Period
Combat aircraft are vital for protection against aerial threats, as they can engage in, both, aerial warfare and ground-support missions. Global military powerhouses, such as the United States, the United Kingdom, China, France, and Japan are vying to achieve a profound reconceptualization of modern aerial warfare techniques by fostering the indigenous development of fifth-generation and the envisioned sixth-generation combat aircraft. The F-35 Joint Strike Fighter (JSF) is one of the most advanced combat aircraft currently in service. At the start of 2020, Lockheed Martin Corporation announced that the company successfully reached its annual delivery target of 131 units of F-35 JSF aircraft in 2019. Constellium supplies the corrosion-resistant 7050 and 7140 alloys used in the F-35 airframe. It is also a major supplier of the Airware 2297 and 2098 alloys used in the bulkheads, skins, and other key structural components of the Boeing F-18 and Lockheed Martin F-16 aircraft programs. On a global scale, the demand for combat aircraft greatly outnumbers the demand for non-combat aircraft, hence the segment is envisioned to dominate the market in focus during the forecast period.
North America to Continue its Dominance in the Market
The United States, one of the leading defense spenders, globally, is focusing on increasing its defense expenditure every year. Currently, it spends about 3.2% of its GDP on defense. In July 2018, the US government instructed the NATO leaders to increase their defense spending, to meet 2% of the country's economic output, and further increased up to 4%, higher than the group's goal of 2%. Following this, in November 2019, NATO announced that in 2019, the defense spending across European Allies and Canada increased in real terms by 4.6%, marking the fifth consecutive year of growth. Compared to other regions, North America houses a majority of aerospace OEMs, hence the region boasts of a robust supply chain. Significant investments in R&D resulted in the development of sophisticated fabrication processes for advanced aerospace materials. For instance, in April 2018, Toray Composite Materials America Inc. announced successfully development of a new fabrication technology for Carbon Fiber Reinforced Plastics (CFRPs), which enables, both, improved dimensional accuracy and energy savings for aircraft manufacturing. Dispersal of several new procurement contracts for aerial assets is envisioned in the future, driving the North American segment of the market during the forecast period.
The rapidly evolving aerospace industry calls for a solid supply chain, where transparency and traceability are of paramount importance, especially since the aircraft OEMs face mounting market pressures to increase production rates through continuous improvement and automation, while keeping an eye on sustainability and energy/cost efficiency. Thus, a reliable, standardized production process and consistent data capture throughout the production cycle are crucial to ensure repeatability, while ensuring the quality of the finished materials. However, the regional market is consolidated, as strategic collaborations have become a frequent occurrence. For instance, Toray Composite Materials America Inc. acquired TenCate Advanced Composites in 2018. Also, in October 2019, AMG Advanced Metallurgical Group NV signed a definitive agreement to acquire the assets of International Specialty Alloys from Kennametal Inc. The defense aircraft materials market is highly competitive, and it is marked by the presence of many prominent players competing for the market share. The stringent safety and regulatory policies in the defense sector are expected to restrict the entry of new players. Furthermore, the market is primarily influenced by the prevalent economic conditions in dominant markets like the United States. Hence, during an economic downturn, contracts may be subjected to deferral or cancelation and lead to a relatively slower growth rate, which, in turn, can adversely affect the market dynamics and the manufacturers.
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