The European air traffic management market is anticipated to register a CAGR of over 5% during the forecast period.
- The growth in demand for air travel and aerial connectivity in Europe have driven the airlines to introduce new routes and increase flight movements, to cater to its growing demand. New airport constructions and expansions are also helping the procurement of air traffic management systems.
- The airport authorities of the European countries are focusing on upgrading the existing airport infrastructure, with new air traffic management systems, to provide more efficient air traffic services. Additionally, the increasing demand for reliable air traffic control operations and safety are some of the influencing factors for the market's growth.
- However, various operational challenges in air traffic management and related modernization projects, along with unprecedented factors, like the widespread and deleterious impact of the COVID-19 pandemic may deter market growth.
Key Market Trends
Enhanced Emphasis on Modernizing Aviation Infrastructure
The rapid growth in passenger traffic encouraged airlines to induct new aircraft into their active fleet, which resulted in an increased aircraft movement at an airports. To foster organic and sustainable growth, airports are adopting entrepreneurial and proactive measures, including the procurement of agile air traffic management systems to improve operational efficiency. Besides, the integration of satellite navigation systems onboard the aircraft enabled air traffic controllers to control all aspects of the flight of an aircraft, and help to assist the pilots whenever necessary, mainly to avoid mishaps or security breach events. Furthermore, the introduction of favorable aviation initiatives in the European Union (EU) are also fostering the growth of air traffic management systems in the region. For instance, the EU's Single European Sky ATM Research (SESAR) technological program aims to improve the air traffic management (ATM) performance, by modernizing and harmonizing ATM systems within Europe. Under the Single European Sky initiative, the EU plans to reform the European ATM, in order to cater to the air traffic growth. The European Union and EUROCONTROL have each pledged EUR 700 million for the development of the project, which was valued at EUR 2.1 billion. Such developments are envisioned to drive the growth of the market studied during the forecast period.
United Kingdom to Retain its Dominant Market Share During the Forecast Period
With air passenger traffic anticipated to double by 2035, expansion plans are underway at nearly every major commercial airport in the United Kingdom. The UK government drafted its 2050 Aviation Strategy to support the growth of aviation in a sustainable manner, in order to minimize environmental impacts. The MAG-owned airports, especially the Manchester and London Stansted Airport, are forging ahead with construction projects, mainly to deliver increased capacity in a shorter timescale than at London Heathrow and Gatwick. While the Manchester Airport’s USD 1.3 billion Terminal 2 extension was partly completed in 2019, construction is underway for a new 200 m pier at the airport, which is scheduled to become fully operational in 2022. Meanwhile, the first phase of the USD 775 million transformation program at the Stansted Airport was completed in October 2018. The estimated completion date is 2021. Furthermore, London City and London Luton airport projects, which are valued over USD 1 billion in total are scheduled for completion in 2019 and 2020, respectively. Such programs are envisioned to drive the growth opportunities of the market in focus in the United Kingdom.
The European air traffic management market is highly fragmented, with many local as well as international players providing various ATM systems and software, as well as services. The prominent market players, such as Honeywell International Inc., Leidos Inc., Indra Sistemas SA, Thales Group, and SITA, are concentrating on the launch of sophisticated systems with integrated AI-based technologies, mainly to ensure machine learning capabilities and radically improve efficiency and speed to access important data from the database. Key players are expected to benefit from a partnership with local producers of ATM systems, parts, and components, as well as third-party software manufacturers of ATM systems. Though the ongoing COVID-19 crisis caused widespread disruptions in the aviation industry, the effects are expected to be short-term, with major relief packages and other government initiatives being launched to facilitate the recovery of the aviation sector. On this note, the industry experts anticipate the market to return to normalcy by 2022.
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