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Aerospace and Defense

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The Aerospace sector is a vibrant, high value, high technology engineering, manufacturing and service industry - with strengths are in areas such as the design and manufacture of large aircraft wings; aircraft engines; helicopters and advanced systems including landing gear, fuel, mechanical, avionics and electrical power.

The aerospace sector is well placed to take advantage of the increased demand for air travel and rising demand for new aircraft as a result of rising per capita income.

Environmental regulations and considerations are key drivers for the latest technology developments.

The sector has significant economies of scale and is therefore highly concentrated. It is, however, open to international competition and strong global brands are important. Airbus, Rolls Royce and Bombardier are key players in the global market.

UK has a 17% global market share in aerospace industry revenues: the largest in Europe and second only to the US worldwide. Furthermore the sector supports more than 3,000 companies distributed across the UK, directly employing 100,000 people and supporting an additional 130,000 jobs indirectly. Finally, it has been estimated that there will be global demand for 27,000 new passenger aircraft, worth around .7 trillion, by 2031. In addition, global demand for commercial helicopters is expected to be in excess of 40,000 and worth circa 5 billion by 2031.

With fuel prices being volatile, optimizing resources is a priority for the aerospace sector.

Research and development plays a key role in Aerospace Industry to meet the changing needs and requirements. The aerospace industry is engaged in researching, designing, manufacturing and operating commercial, industrial and military aircrafts. Besides, the defense sector, spacecrafts open up opportunities for the introduction of emerging technologies.

The added pressure to reduce emissions, is driving the need for innovation to reduce component weight.

The industry is witnessing a great transformation driven by increasing awareness in green power, as well as advances in nanotechnology and smart materials, which are lightweight yet robust enabling better aerodynamics and passenger safety.

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Aircraft manufacturing can be broken down to defense and commercial segments.
The aerospace and defense manufacturing market consists of sales of commercial aircraft, components and auxiliary equipment, as well as air, sea and land based defense equipment such as weapons, artillery tanks, radars, other military equipment, and aircraft maintenance services.

The two largest commercial jet manufacturers are Boeing and the European Aeronautic Defence and Space Company (EADS) for Airbus; sharing between them about 65% of the world airliner fleet. Canada’s Bombardier, Brazil’s Embraer and Japan's Mitsubishi Heavy Industries are competing for the remaining market share. General Electric and United Technologies Corporation are ranked among the most important suppliers of aircraft engines and parts.

Leading military aircraft contractors include Boeing, EADS/Airbus, United Technologies, Raytheon, Northrop Grumman and General Atomics Aeronautical Systems are ranked among the global leading aerospace and defense technology companies.

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Leading aerospace and defense manufacturers worldwide, based on sales (in million U.S. dollars)

Economic inequalities and political instabilities are the source of territorial wars and armed conflicts between countries.

Rising expenditure on military equipment and increasing demand for smart and precision weapons, has been generating opportunities for the leading players operating in this sector.

In 2018 the USA defense budgets were increased, and there are plans to increase investments in military equipment in the European Union.
U.S, China, the Middle East, Israel and Russia are increasingly spending billions of dollars in military expenditure. Overall, the United States holds the largest share of worldwide military spending; around 40 percent of global defense spending.

The revenues of the aerospace and defense industry are expected to grow to over trillion by 2022.
The total available market for the defense industry will grow to 7.0 billion by 2027.

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Strategy Analytics’ global defense analysis is based on an assessment of 95 countries that spent a minimum of $ 500 million on their annual defense in 2017.

The Strategy Analytics’ outlook for global defense spending is based on baseline information from SIPRI (Stockholm International Peace Research Institute);
information on the SIPRI data can be found at http://www.sipri.org/research/armaments/milex/milex_database/milex_database.

Spending on radar, EW and communications will be some of the priorities for defense spending along with Command and Control (C2), Computers, EO-IR (electro-optical and infrared) sensors, navigation and smart weapons. However, high costs associated with the manufacturing quality defense systems and delayed sanctions are affecting the defense sector.

While the overall defense spending profile maintains an upwards trajectory, to successfully capture the underlying opportunities, will require the defense industry to understand the tailoring required for partnerships, capabilities and solutions.

Segments of the Defense sector include military aircrafts, surface ships/undersea, ground vehicles, unmanned ground vehicles (UGVs) and unmanned air vehicles (UAVs) and unmanned sea vehicles, missiles, satellites. Also platforms that provide capabilities in the areas of radar, communications, electronic warfare, sensors.

Apart from military modernization programs and shifting geopolitical tensions and territorial conflicts, drivers of growth for the defense industry include Military unmanned systems, and Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) technologies, the cyber-security sector, as well as the application of technology innovations, and other factors promoting the sales of various types of ammunitions.

Our reports cover air, sea and land based defense equipment such as weapons, artillery tanks, radars, other military equipment, and support services such aircraft maintenance, repair, overhauling, and support services.

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Unmanned Systems are increasingly being adopted. With proliferating use of unmanned systems in combat operations, ISR (Intelligence, surveillance, target) acquisition, climate & pollution monitoring, border security operations, and maritime operations, the demand is expected to grow.

The Space industry is also fuelling demand for satellite manufacturers, component providers, launch companies, technical service providers. Small satellite constellation architectures, reusable launch vehicles, space travel, and other technologies have attracted new investors into this industry.

Space technology provides the basis for much of modern life, with services supporting communications, environmental monitoring, navigation and security.

The global economy increasingly depends upon Space infrastructure and hardware, such as satellites and advance infrastructure.

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Rising fuel costs, staff shortages, consumer demand for flights declining and a fragile economy have all impacted the aviation industry.

The challenges that both airlines and airports are facing:

Improving efficiency: Airlines are employing models to limit airline delays — including crowd sourcing and computer algorithms.

Airports are becoming congested and security is at an all-time high, so management now face an uphill struggle; keeping the business in profit, maintaining security, coping with increased competition and of course, the ever-present threat of adverse weather conditions.

Security: Keeping passengers safe both in the airport and while flying remains paramount, especially in the wake of events including September 11.

In-flight connectivity: As modern technology makes instant connectivity and Wi-Fi an expectation of the modern consumer, transport businesses are having to keep up.

Safety in the air: While travel by air safety is reportedly the best, supported by the use of tools to predict weather conditions, there are still concerns when it comes to the higher crash-rates of Latin America, Africa and developing regions. Pilots are under scrutiny, as cockpit automation and increasingly congested airports may prove to become hazards.

New fuels: Biofuels, renewable energy sources derived from biological material, can be used as a replacement for traditional fossil fuels. However, the sheer quantity and expense in production due to the industry’s young age means that it is not necessarily financially viable for airline carriers.

Going green: It is not just biofuel development and the impact on the environment that are impacting the aviation industry, but airlines have had to cope with the introduction of legislation which would tax them based on carbon emissions.

Innovative plane design: Cutting weight off craft as well as new hybrid designs with elements including foldable wings that reduce fuel consumption are examined.

Consumer demands and the willingness to pay: Average ticket prices have jumped 10 percent in the last several years, and we expect this trend to continue— especially as some governments have been increasing passenger duties.

Bringing airports and airlines into the 21st century: From printing your own baggage labels to avoid check-in, booking online or showing your e-ticket to check-in staff when you arrive, flying is now a different scenario from showing a passport and receiving a ticket in the post. However, if airlines are going to survive, they need to do more than simply invest in new tech — they need to make their businesses better.

Finding staff: It’s not all about the technology. According to reports, airlines are finding it increasingly difficult to find and train up pilots.

Our reports provide key statistics and analysis on market operating conditions, business challenges, current and historical industry growth trends, and more. They offer an explanation of the structure of the industry and analysis across the value chain, market sizes, revenue growth, market and product trends, demographics, price trends, product/company rankings or comparisons, key players profiles, comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies,designed to provide a better understanding of a market's competitive landscape, and market forecasts, projecting how current trends will influence industry sales and consumption patterns in the future, latest market developments and analyzing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook.

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