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The global air traffic management and consulting market size was USD 11.30 billion in 2020 and is projected to grow from USD 11.50 billion in 2021 to USD 16.11 billion in 2028 at a CAGR of 4.93% in the 2021-2028 period. The global impact of the COVID-19 pandemic has been unmatched and staggering, with air traffic management and consulting systems and services witnessing a low demand across all the regions amid the pandemic. Based on our analysis, the global market exhibited a decline of -15.04% in 2020 compared to the average year-on-year growth during 2017-2019. The sudden fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Air traffic management is mainly used to ensure the disciplined and safe flow of air traffic without any mistakes. The primary objective of this system is to reduce the congestion problem at the airports or keep sufficient difference between aircraft to avoid collision on the ground by suggesting the right direction during a flight. It controls the flow of traffic day in and day out. This system helps the airline authorities to provide an efficient and hassle-free travel experience to passengers. Air traffic management and consulting service include airspace management (ATFM), air traffic flow management (ATFM), and air traffic control (ATC).
Moreover, more working on this direction also ensures the best balance possible among the supply and demand with time and space for aircraft. Recently, there have been advancements in communication technology and airport connectivity. This technology has improved performance, airport efficiency, flight safety and reduced the overall delay in flights. These factors are projected to fuel the demand for air traffic management and consulting systems during the forecast period.
Decreased Air Passenger Traffic amid COVID-19 to Decline Growth
The COVID-19 situation has resulted in legislative limitations on international and domestic travel. The stringent restrictions on air travel resulted in reduced air passenger traffic across the world.
The global economic crisis can worsen if the pandemic spread is not controlled or reaches extreme conditions. In both circumstances, the aviation industry is forecasted to suffer a heavy loss.
These estimates are based on the consequence of numerous travel restrictions worldwide and a tremendous fall in passenger demand from February 2020. Major developed and developing countries are facing financial crunches owing to the COVID-19 outbreak. The The world economic growth has impacted and influenced public and private investment. This factor is projected to impact negatively on the new business development opportunities over the next few years.
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Rising Adoption of AI Technology in ATC Remote Towers to Enhance Aircraft Operation is Prominent Trend
In recent years, the market size of unmanned aerial vehicles and urban air mobility has risen. This growing number of UAVs and air taxies has increased the concern regarding the safety and security of air traffic congestion. Therefore, aviation organization such as the Council of International Civil Aviation Organization (ICAO) and Civil Air Navigation Services Organization (CANSO) has predicted a significant demand for air traffic management solution in coming years. Several airlines in high-growth regions have increased their focus on adopting the next-generation ATM system with artificial intelligence (A.I.) technology. This advanced system allows airlines to enhance the real-time communication between the aircraft and the air traffic control (ATC) authority. This trend is anticipated to transform this market in the upcoming years.
Increasing Air Traffic Around the Globe is Resulting in Need for Advanced ATM Solution
In the last decade, there has been exponential growth in air passenger traffic in developing countries such as India and China. This growth has increased the demand for new airports. The increased need for airport expansion due to increased air traffic would also surge the demand for modern air traffic management solutions.
Growing New Airport Project in APAC to Fuel Market Growth During Forecast Period
The Airports Council International is working on several airport authorities around the globe, owing to the growing demand for air travel and the importance of investment in airport infrastructure.
Rise in investment in airport infrastructure is predicted to provide lucrative growth of air travel services, which directly contributes to economic development, employment opportunity, and social benefits. The increase in demand for domestic air travel from the past few years is projected to reach 10.7 million by 2022 at a significant rate. According to ACI, the developing markets of aviation in Asia and South East Asia are expected to surpass the market in developed economies in future. Moreover, new airports will need efficient air traffic management services, equipment, and software solutions in the forthcoming years. This, in turn, is expected to boost the air traffic management and consulting market growth during the forecast period.
High Cost Associated with the Deployment of Air Traffic Management and Consulting Solution to Impede Growth
The air traffic management and consulting system involves huge hardware costs, such as monitors, communication systems, displays, radars, surveillance systems, navigation, and others. These systems comprises of modern technology and complex engineering for the development. Several machines, systems, and components are used to establish an extensive infrastructure for practical systems. This factor leads to development of high cost airport facility infrastructure. This, in turn, is projected to hamper the market growth during the forecast period. Moreover, the demand for this system is considered limited in context as very few airports are constructed in the countries. This factor can lower the market growth in future.
Air Traffic Service Segment Hold Dominant Market Share in the Base Year
Based on system, the market is bifurcated into air traffic services, airspace management, air traffic flow management, and aeronautical information management.
The aeronautical information management segment is projected to be the fastest-growing in the market during the forecast period.
The air traffic services segment registered the largest share in 2020 in the market. This segment consists of air traffic control, flight information services, and alerting services. The services handle the most critical to manage tasks due to many flight operations that occur day in and day out. These services efficiently regulate the flow of aircraft and navigate with a precise location without fail. The global air traffic has been rising continuously due to the exponential growth of passengers over the past few years. These factors are projected to boost the demand for air traffic management and consulting system during the forecast period.
International Segment to Witness Fastest Growth During Forecast Period
Based on airport type, this market is bifurcated into domestic and international. The domestic segment had the largest market share in 2020. Increasing number of domestic flights due to rising tourism, business, and other sectors is expected to drive the segment growth.
The international segment will showcase the highest growth during the projection period. This growth is due to increasing number of international air passengers across the globe, rising number of airline service providers and airports, and growing investment in the aviation sector.
Software Segment to witness Fast Pace Growth during Forecast Period
By component, the market is segmented into hardware, software, and services. The services segment is projected to grow significantly in this market in the upcoming years. An increase in automation across the industry resulted in software adoption for effective management across the globe. The software comprises different types of algorithms capable of resolving complex calculations with an effective management solution. Software-based systems use most aeronautical information and control systems. These factors are anticipated to propel the growth of the market during the forecast period. The hardware segment held a significant share in the market in 2020. The services segment will witness lucrative growth opportunities in the near future. This trend is expected to continue during the forecast period.
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Commercial Segment to Dominate the Market in 2020
By end-user, the market is classified into commercial and military. The commercial end-user segment dominates the market with a significant share in the base year. The rising preference for air travel worldwide results in increased air traffic, which further increases the demand for air traffic management solutions to enhance operational efficiency. In addition to this, ATM systems require regular up-gradation and maintenance for more extended durability.
On the other hand, the military segment witnessed fast pace growth during the forecast period due to the increase in adoption of advanced air fighters, medium altitude long endurance UAV, and high altitude long endurance UAVs to boost national security. The Increasing procurement of military aircraft is fuelling the demand for air traffic management and consulting solutions.
North America Air Traffic Management and Consulting Market Size, 2020 (USD Billion)
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The global market is studied across North America, Europe, Asia-Pacific, and the rest of the world.
North America held the largest market share in 2020. The dominant share is due to the large aviation industry and constant adoption of next-generation technologies to enhance airport and aircraft operation efficiency. In addition, the presence of several key players in the U.S., such as Raytheon Technologies Corporation, L3Harris Technologies, Inc., Northrop Grumman Corporation, Honeywell International, Inc., and Lockheed Martin Corporation, are expected to fuel the market growth in North America.
The market in Europe is expected to register the second-highest share in the market. The presence of several air traffic management system manufacturers in this region, such as Thales Group, BAE System PLC, Indra Sistemas S.A, and Saab AB, is expected to boost the market growth in Europe.
Asia Pacific will witness the highest compound annual growth rate during the forecast period. This growth is due to increase in demand for modernization of existing airports, one of the key driving factors in the region. As per our study, the region is expected to showcase substantial growth in the market during the projection period owing to the significant rise in airport construction projects in developing countries such as India and China. Moreover, the continuously growing air traffic and focus on improving airport and aircraft security are the key reason to propel the market growth in Asia Pacific. The region is anticipated to show long-term growth in the market.
The Middle East air traffic management and consulting market witnessed significant growth during the forecast period. This growth is due to the strong presence of international airports. Moreover, the growing investment in the tourism sector and large air traffic concerns in the region are projected to drive the market growth in this region. Furthermore, the rest of the world will showcase moderate growth during the projection period due to increased global air passenger traffic.
Constant Innovation, Acquisition, and Collaboration Strategies Adopted by Key Players to Sustain their Market Positions
The competitive landscape of this market depicts the domination of selected players such as Thales Group, Harris, Northrop Grumman Corporation, and Honeywell International. A diversified product portfolio of ATC and the increased investment in RandD and strategic acquisition are some of the prominent factors responsible for the dominance of these companies. They adopt organic and inorganic growth strategies such as mergers and acquisitions, new product launches, and long-term contracts with the airport authority and the state government.
An Infographic Representation of Air Traffic Management Market
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The global air traffic management and consulting market research report provides a detailed industry analysis and focuses on key aspects, such as renowned manufacturers, systems, demanding technologies, and end-users. Moreover, it offers insights into air traffic management and consulting solution trends and highlights key industry developments. In addition to the factors mentioned above, the market report encompasses several direct and indirect factors that have contributed to the market's growth over recent years.
Value (USD Billion)
System, Airport Type, Component, End User, and Geography
By Airport Type
By End User
Fortune Business Insights says that the global market size was USD 11.30 billion in 2020 and is projected to reach USD 16.11 billion by 2028.
Registering a CAGR of 4.93%, the market will exhibit steady growth in the forecast period (2021-2028).
The air traffic services system, hardware component, and commercial end-user segments are the leading segments in the market.
Thales Group, Honeywell International Inc., L3Harris Technologies, Inc., and Saab AB are the leading players in the global market.
North America dominated the market in terms of share in 2020.
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