Avionics Market Size, Share & COVID-19 Impact Analysis, By System (Hardware and Software), Platform (Commercial, Military, Business Jets, and General Aviation), End-Use (OEM and Aftermarket), and Regional Forecast, 2023-2030

The global avionics market size was valued at USD 81.68 billion in 2022 and is projected to grow from USD 90.32 billion in 2023 to USD 159.35 billion by 2030, exhibiting a CAGR of 8.45% during the forecast period.

The term avionics is the combination of the terms "aeronautics" and "electronics". It is installed in an aircraft or spacecraft may include engine controls, flight control systems, navigation, communications, flight recorders, lighting systems, threat detection, fuel systems, and electro-optical systems. (EO/IR) systems, weather radars, performance monitors, and systems that perform hundreds of other mission and flight control tasks. Commercial airliners, helicopters, military fighters, business jets, and spacecraft all use avionics to provide services, execute missions, make new discoveries, monitor and report performance measures, and operate within established safety parameters.

The most advanced systems integrate multiple functions to improve performance, simplify maintenance, and reduce costs. The hardware is a combination of an automatic flight management system (AFMS), communication, navigation, surveillance (CNS), electrical system, auto throttle, emergency system, mission & tactical system, inflight entertainment system, health monitoring system, collision avoidance system, weather system, and fuel management systems. The software consists of safety-critical airborne software, mission flight management software, flight management software, aircraft health diagnostic software, training & simulation software, and others.

The avionics market share is set to depict immense growth in terms of advancements and revenue. The rising applications and commercial aviation market, growing adoption of advanced technology and systems such as fly-by-wire are some primary factors responsible for the growth of the market. Additionally, the rising procurement state of the art military aircrafts for transport and combat applications to add up to the growth during the forecast period.

COVID-19 IMPACT

COVID-19 Pandemic Led to Delays in Aircraft Deliveries and Increasing Backlogs with the OEMs

Started in December 2019 in Wuhan, China, COVID-19 pandemic had a drastic impact on the global economy, consequently impacting the global aviation industry. The worst hit sector by the pandemic was the aircraft manufacturing industry. The lack of skilled labor and disruption in the supply chain led to the delay in the deliveries of aircraft, creating a load of backlogs with OEMs.

Airbus and Boeing, the two aircraft manufacturers, delivered 30% and 60% fewer planes in 2020 and reported the lowest aircraft orders in more than a decade. Moreover, Airbus, one of the world's largest manufacturers of commercial aircraft, reduced its aircraft production by about a third due to the COVID-19 pandemic. For instance,

• In 2020, Airbus reported a total delivery of 566 commercial aircraft, with net commercial aircraft orders totaling 268 (2019: 768 aircraft) with the order backlog of 7,184 commercial aircraft as of 31 December 2020. 


• In 2020, Boeing reported a total delivery of 157 commercial aircraft with net commercial aircraft orders totaling 184 (2019: 246 aircraft), with the order backlog comprising around 4000 commercial aircraft as of 31 December 2020.

LATEST TRENDS

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Emergence of A.I. in Military Combat Systems is the Prominent Market Trend

Like almost any other industry, artificial intelligence (AI) has a huge impact on the aviation industry. Fifth and sixth-generation fighter aircraft are under development and are leaning more and more toward optional or unmanned versions. It means avionics systems, with the help of artificial intelligence, would enable unmanned aircraft operations. The F-16 already has an unmanned version and the next-generation B-21 bomber is anticipated to get fit with autonomous systems. A.I. is already deployed in avionics to provide combat aircraft with optimized intercept profiles, weapon guidance and trajectory, takeoff avoidance, and ISR. The F-35 has artificial intelligence assistance in its avionics systems.

Another area of ​​avionics that A.I. can be deployed is target recognition. In April 2021, Rafael Advanced Defense Systems Ltd. demonstrates new automatic target recognition (ATR) capabilities and autonomous weapons systems capable of operating in GPS-deprived environments using inertial navigation systems (INS). Basic navigation in the target area and ATR mode for automatic detection and identification of individually assigned targets. Thus, the integration of A.I. with the modern system spurs numerous opportunities for technology growth and avionics market growth during the forecast period.

DRIVING FACTORS

Improving Adoption of Flight Management Systems and Aircraft Computing to Propel the Market Growth

Aircraft computer systems provide proline fusion capabilities, integrated cabin electronics solutions, communications systems, navigation systems, surveillance systems, integrated flight controls, and simulation and training systems. All these systems are improving the operational performance of aircraft. The proline fusion capabilities are a combination of flight guidance & information management, touch control of primary flight displays, and advanced flight and performance management. Flight management system enables smooth navigation and performance, ensuring security and effective management of the aircraft.

A navigation system consists of landing sensors that are used to enable fully automatic landings. The situational awareness and surveillance systems, integrated flight controls, and simulation and training systems are improving operational aircraft performance. The air traveling safety & security has been increased due to the avionics system. An increase in post-pandemic travel has led to a subsequent rise in the demand for specialized integrated system, thereby increasing the overall market demand.

Increasing Procurement of Modern Generation Aircraft Owing to Growing Airline Industry to Impel Industry Expansion

The next-generation commercial aircrafts are now equipped with high-tech avionics systems for smooth flying operations. These high-tech systems help ease maintenance operations by reducing downtime. On the other hand, the airline industry has started recovering from the impact of the COVID-19 pandemic and is focused on expanding its fleets by procuring or leasing next-generation aircraft. The growing market of low-cost carriers and budget airlines is one of the major factors responsible for increasing procurement of airliners. These low-cost carriers have already placed bulk orders of narrow and wide-body aircraft for fleet expansion.

Besides, the full-cost airline operators have also placed bulk orders with the OEMs and are expecting deliveries by the end of 2025.

• For instance, in December 2022, Boeing announced that United Airlines placed an order for 100 787-9 Dreamliners, with another bulk order to purchase 100 more. The transaction is the largest 787 Dreamliner order in Boeing's history. Also, United Airlines is purchasing 100 737 MAX jets.

RESTRAINING FACTORS

High Cost of Maintenance of Systems to Restrict the Market Growth 

Cost is one of the major factors considered in terms of aircraft operations and maintenance. The maintenance cost is extremely high for modern-generation aircraft. It can be as high as one-third of the aircraft maintenance cost. Modern avionics includes a large number of LRMs and LRUs. In turn, each LRU/LRM consists of several printed circuit board assemblies with built-in test equipment (BITE) for continuous monitoring during flight.

These LRUs are, when tested faulty, the whole system is replaced with a spare or a new system. The faulty ones are then taken to a dedicated workshop for maintenance and require skilled maintenance personnel to perform maintenance actions on them. The replacement and maintenance process is not cost-effective for the airline and aircraft operators, hampering market development.

SEGMENTATION

By System Analysis

Hardware Segment to Dominate Driven by Trajectory Projection Capabilities

Based on system, the market has been segmented into hardware and software. The hardware segment held a dominant share of the market in 2022. The dominance of this segment is attributed to the multitasking capability of the hardware system. It carries out trajectory prediction and rote guidance to the aircraft. Additionally, several OEMs have now started launching high performance solutions for complex launches.

The software segment is projected to register a high CAGR over the forecast period. This is due to the increasing use of software systems in avionics to improve the flight operation capability. Numerous OEMs globally have initiated partnerships and joint ventures to provide best possible software in avionics.

• For instance, in March 2022, the New Zealand-based airborne communications supplier, Flightcell, introduced a new all-in-one cockpit SmartHub recorder targeted to the rotorcraft market. The cockpit is said to be advanced and well fitted with latest avionic software.

By Platform Analysis

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Military Segment to Grow At Faster Pace Owing to Rise in Defense Related Government Expenditures

Based on platform, the market is classified as commercial, military, business jets, general aviation, and helicopters. The commercial segment accounted for the largest share in the market during the forecast period. An increasing demand for commercial aircraft for the past two decades has led to segment’s dominance. The increase in the number of air passengers across the world is projected to boost the market growth over the forecast period.

The military segment is projected to register a high CAGR during the forecast period due to the increasing defense expenditure in major countries such as the U.S., China and India. India is set to spend USD 72.6 billion on military spending in 2023-2024, while China is anticipated to spend 225 billion. China's 7% growth in military spending actually exceeds its target economic growth rate of about 5%. Moreover, these countries are continuously procuring high tech military aircrafts for combat and transport applications. For instance, in June 2022, the U.S. Air Force (USAF) entered a contract with Raytheon Technologies, a U.S. based defense manufacturer. The contract was focused on upgrading avionics on the service’s Fairchild Republic A-10C Thunderbolt II ground-attack jets.

By End-Use Analysis

Aircraft Upgradation and Growing Aftermarket Opportunities to Boost Aftermarket Segment 

Based on end-use, the market is classified as original equipment manufacturers and aftermarket.

The aftermarket segment held a dominant share in the market in 2022. The growth is attributed to up-gradation programs from several commercial airlines. The renewal of up-gradation contracts from different aircraft OEMs such as Boeing and Airbus with European airlines drives the market growth during the forecast period.

The OEM segment is predicted to grow at the highest CAGR over the forecast period. The high growth is attributed to the increasing number of business jet and military aircraft deliveries across the globe. The research and development (R&D) programs to develop technologically advanced aviation computer components to improve the reliability of aircraft is projected to boost the market.

• For instance, in November 2021, Collins Aerospace, a Raytheon Technologies Corporation subsidiary entered an agreement with Emirates Airline to upgrade the latter’s fleet of 107 A380 and 101 B777 aircraft with the Collins Aerospace’s latest GLU-2100 multi-mode receiver (MMR) and give satellite communication (SATCOM) facility and a full suite of avionics to Emirates’ 777X aircraft.

REGIONAL INSIGHTS

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The market size in North America accounted for USD 30.83 billion in 2022. The dominance of this region is attributable to the increasing demand for commercial aircraft type for fleet expansion. The U.S. is one of the biggest airline industries, with airlines having more than 1000 operating aircraft. Moreover, the region has the presence of major aircraft and avionics system manufacturers such as Boeing and General Electric.

These companies continuously work in partnerships and invest in R&D to enhance the avionics capabilities in the forthcoming aircraft models for commercial and military applications. As per a report by the International Air Transport Association (IATA), passenger demand growth is expected to boost the aviation sector in 2023, leading to high growth in the forecast period.

Europe has registered striking growth in the market due to the presence of key players such as Thales Group and Safran. These companies are prominent market players in the market and have an extensive range of product portfolios. Regarding regional presence, these key players are considering to setup plants outside Europe. Furthermore, they have a strong regional presence across the globe.

The Asia Pacific market is predicted to exhibit healthy growth during the forecast period and owing to the expanding aviation industry in China and India. In addition to this, China aviation continues to remain second-largest defense spending economy after the U.S. According to the global aerospace and defense industry outlook report 2020, and China required 8,090 aircraft over the next 15 years. Moreover, the growing aftermarket industry in the region to boost the region grow.

The rest of the world had a noteworthy growth due to growth in the airline industry across Latin America. This growth is attributed to the growing airline industry throughout the Middle East region. Moreover, the growing procurement and demand for military aircraft from emerging region such as Latin America to boost the market growth.

KEY INDUSTRY PLAYERS

Standout Research Processes Integrated by Key Market Players to Develop Innovative Technology to Propel the Market Growth

The designing of a technologically advanced system, low-cost software-defined radio system, a more efficient communication system for aircraft are the upcoming trends in the market. A diversified product portfolio, along with innovative research ideology accepted by key players, is the major factor in boosting the market.

LIST OF KEY COMPANIES PROFILED:

• BAE Systems PLC (U.K.)


• Cobham PLC (U.K.)


• Raytheon Technologies Corporation (U.S.)


• Garmin Ltd. (U.S.)


• General Electric Company (U.S.)


• Honeywell International Inc. (U.S.)


• L3Harris Technologies Inc.(U.S.)


• Meggitt Ltd. (U.K.)


• Safran S.A. (France)


• Teledyne Technologies Incorporated. (U.S.)


• Thales Group (France)


• Transdigm Group Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2023 – Lockheed Martin Corporation entered a partnership with IFS Global to strengthen their market position by using each other’s market strengths. The partnership is aimed at promoting various services and products to assist aerospace and defense groups in modernizing both equipment and supporting technological infrastructure.


• February 2023 – The USAF awarded a USD 135 million contract to Collins Aerospace for providing electronic control system of C-130 aircraft. The Collins Aerospace would provide manufacturing and engineering support for the NP2000 eight-blade propeller, electronic propeller control system, and spare parts for Air Force C-130 production.


• November 2022 - Collins Aerospace extended its On-Site Support (OSS) contract with China Southern Airlines (CSN) to 15 Years. The agreement would add tech support for Collins' Integrated Drive Generator (IDG) and other generators for multiple aircraft such as the B787, A320neo and ARJ21.


• November 2022 - BAE Systems PLC was awarded USD 89 million contract to service and support the Eurofighter Typhoon aircraft’s avionics for the airforce platforms of Germany, Spain, the U.K., and Italy, for the next five years.


• September 2022 - Safran entered an agreement with Thales to acquire its aeronautical electrical systems business segment. The agreement included acquisition of Thales Avionics Electrical Motors and Thales Avionics Electrical Systems. Moreover, the agreement included acquiring Thales’ support, maintenance, and activities for aeronautical electrical equipment in Singapore and Orlando, Florida, in the U.S.

REPORT COVERAGE

An Infographic Representation of Avionics Market

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The global market research report covers the in-depth analysis of the industry. It majorly focuses on key aspects such as leading market players, COVID-19 effect on the market, product systems, and leading technological trends, and research ideology of the product. Besides this, the report offers insights into the market trends and highlights key industry developments, porter s five forces analysis and trends. In addition to the factors above, the report provides multiple factors that will contribute to the market growth during the forecast period.

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