Military Drone Market Size, Share & COVID-19 Impact Analysis, By Product Type (Fixed Wing, Hybrid and Rotary Wing), By Range (Visual Line Of Sight (VLOS), Extended Visual Line Of Sight (EVLOS), and Beyond Line Of Sight (BLOS)), By Technology (Remotely Operated Drones, Semi-Autonomous Drones, and Autonomous Drones), By System (Airframe, Avionics, Propulsion, Payload, Software, Others), By Application (Intelligence, Surveillance Reconnaissance and Targeting (ISRT), Combat Operations, Battle Damage Management, Logistics & Transportation and Others), and Regional Forecast, 2022-2029

The global military drone market size was valued at USD 10.25 billion in 2021 and is projected to grow from USD 11.73 billion in 2022 to USD 30.86 billion by 2029, exhibiting a CAGR of 14.82% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with military drones experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 1.42% in 2020 as compared to 2019.

The growing use of Unmanned Aerial Vehicles (UAVs) in the defense and security industry for several applications such as surveying, mapping, transportation, combat operations, and monitoring will fuel the demand for military UAVs in the coming years. The rise in defense expenditure of various countries to procure modernized & technologically advanced military drones/UAVs for intensified combat capability is expected to support market growth across the globe. The adoption of Artificial Intelligence (AI) is modernizing military drone technologies by picking targets autonomously with precision.

COVID-19 IMPACT

Disruption in Supply Chain Analysis Due to COVID-19 to Affect Market Growth

The COVID-19 impact on the global economy is expected to be uncertain in the forthcoming years. The COVID-19 outbreak in December 2019 devastated the global economy. The impacts of COVID-19 had a significant influence on the market in 2020 and 2021.

The purchase of defense equipment required related services have been affected due to a lack of confidence in the market, resulting in fewer military drone business contracts. Deliveries of several drones were delayed amid the COVID-19 pandemic. Defense budget cuts from various countries, such as the U.S., India, France, and Israel, have been observed. 

• The U.S. defense budget was reduced from USD 723 billion in 2020 to USD 704 billion in 2021. The defense budget of India was reduced from USD 72.9 billion in 2020 to USD 65.5 billion in 2021.  Similarly, France and Israel's defense budgets decreased from USD 52.7 billion and USD 21 billion in 2020 to USD 41.5 billion to USD 14.07 billion in 2021 respectively.


• According to the U.S. defense budget overview, the DoD invested USD 1.3 billion in 2020 for the procurement of UAVs. The impact of COVID-19 can be seen in the UAV procurement budget for 2021 and 2022 which are USD 0.9 billion and USD 0.7 billion respectively.

LATEST TRENDS

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Introduction of AI with Autonomous Flight System to Drive Market Growth

Drone technology has witnessed strong growth in the past years due to continuous research & development and innovation enhancing its capabilities. The numerous drones are incorporated with modern sensors, LiDAR, GNSS, high-tech cameras, and thermal, and infrared imaging systems.  The most advanced drones are equipped with multiple sensor systems such as communication intelligence sensors, air-to-air missiles, and a global system for mobile communication (GSM). Nowadays, the most advanced unmanned aerial vehicles can carry several payloads attached to large sensors and internal weapons bay. Artificial intelligence (AI) is being adopted commercially for autonomous flight systems for high-altitude military UAVs. This is expected to predict well for the global military drone market growth in the forthcoming years. The weapon payload includes missile and guided bomb units.

DRIVING FACTORS

Increasing Military Spending and Growing Procurement of Military Drones from Defense Forces to Boost the Market Growth

Several countries invested highly in strengthening their defense forces, which is expected to drive market growth. As per Stockholm international peace research institute (SPIRI) report, in 2020, the total global military expenditure rose to USD 1,981 billion which showed an increase of 2.6% from 2019. The top five countries with the highest defense budgets in 2020 were the U.S. (USD 778 billion), China (USD 252 billion), India (72.9 billion), Russia (61.7 billion), and the U.K. (59.2 billion).

Russia, India, China, and Saudi Arabia are investing a large amount in purchasing and upgrading the overall defense system over the last several years. Such factors are projected to fuel the demand for military unmanned aerial vehicles in the next few years.

• In November 2021, India is set to finalize the deal with the U.S. for the procurement of 30 multi-mission MQ-9B long-endurance predator drones. The contract value is worth USD 3 billion. 

Furthermore, the growing procurement of next-generation military drones from military forces drives the market growth.

• In September 2021, Indian Army signed a contract worth USD 13.7 million with Alpha Design along with Israel’s Elbit Security Systems (ELSEC) for the procurement of over 100 strike drones.

Rising Cross Border Conflicts in Several Countries to Fuel Market Growth

Growing border disputes among countries over land ownership and controlling the area between two or more states are expected to increase product demand. For the past few years, India, China, Pakistan, Iran, Israel, Syria, and others are facing territorial issues. These countries have increased military spending for the procurement of real-time surveillance drones to improve situation awareness by upgrading the patrolling of the borders.

In June 2020, China and India border dispute turned very deadly for the first time in more than four decades. Since May, several thousands of Chinese and Indian troops have been on a standoff in the Ladakh region in the Himalayas. Drone technology has an important role in resolving the border dispute. Both countries are using military unmanned aerial vehicles for reconnaissance operations and logistics applications in a high-altitude areas.

RESTRAINING FACTORS

High Cost of Advanced Electronics and Modern Systems to Hinder Market Growth

UAVs are fully equipped with high-tech propulsion systems, avionics systems, advanced flight management technology, modern sensors, and payloads. These parameters are associated with sophisticated software and high-quality hardware systems depending upon the severity of the operations. The deployment of military UAVs has a different product portfolio for the army, air force, and navy, owing to different applications also varying the overall cost of products.

These factors increase the final price of military drones across the globe. The huge product, as well as maintenance cost, is expected to restrain future growth. Restrictions on the deployment of UAVs in several countries and limited use in aerial spaces are also expected to restrict future demand.

SEGMENTATION

By Product Type Analysis

Fixed-Wing Segment to Hold Major Share Owing to its Increasing Use for Long Distance Operations

In terms of product type, the market is divided into fixed wing, hybrid wing, and rotary wing. 

The fixed-wing segment is estimated to hold the highest military drone market share in 2021 and continue its dominance throughout the forecast period. Fixed-wing aerial vehicles can typically carry greater payloads for longer distances and flying times while using less power than VTOL (Vertical Take-off and Landing) UAVs. This makes them ideal for long-distance missions like mapping, surveillance, and defense, in which lengthy endurance is critical and hence is significantly used in the defense sector by various armed forces worldwide. These factors are predicted to propel the segment growth through the projection period.

The rotary-wing segment is anticipated to showcase significant growth worldwide in the coming years, owing to the increasing development of quad-copters. Quad-copters are heavy load carriers widely used for transportation and logistics applications across the globe. Rotary wing drones are also used in tactical operations for Intelligence, Surveillance, and Reconnaissance (ISR) missions.

By Range Analysis

The Extended Visual Line of Sight Segment is Anticipated to Grow at the Fastest CAGR in the Market During the Forecast Period.

On the basis of range, the market is divided into the Extended Visual Line of Sight (EVLOS), Visual Line of Sight (VLOS), and Beyond Line of Sight (BLOS).

The EVLOS segment is predicted to grow at a high CAGR during the forecast period owing to the wide adoption of EVLOS UAVs in proper battle management, electronic warfare, and long-range missions to collect important information.

The VLOS range of drones commonly is used in applications such as fire emergencies, border patrol, and disaster relief & management.

The BLOS segment is expected to grow substantially through the forecast period owing to the growing awareness regarding the technology is progressing toward advancement and commercialization.

These types of UAVs can transport weapons, ammunition, and cargo to the targeted locations.

By Technology Analysis

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Growing Adoption of Remotely Operated UAVs for Military Operation to Drive Segment Growth

Based on end-user, the market is classified into semi-autonomous drones, remotely operated drones, and autonomous drones.

The remotely operated drone segment is projected to have the highest share of the market during the forecast period. The majority of commissioned UAVs are operated remotely around the world due to rigorous government requirements for long-range autonomous flying. For Command & control (C&C) and other telemetry systems, as well as radio communications, this technology is employed in the military type of drones.

The autonomous segment is projected to grow at the fastest CAGR during the forecast period. Several growing economies are focused on the innovation and development of autonomous unmanned aerial vehicles to provide tactical and strategic services.

The semi-autonomous segment will witness significant growth during 2022-2029. This growth is due to the rising preference for fixed-range flight operations to gather vital information.

By System Analysis

The propulsion Segment is Anticipated to Grow at a High CAGR Due to the Increase in the Adoption of Turboprop Engine UAVs in the Military

Based on the system, the market is categorized into avionics, airframe, payload, propulsion, software, and others.

The propulsion segment is projected to grow at a higher CAGR during 2021-2029, owing to the increasing demand for turboprop engines in military UAVs due to high durability.

The airframe segment held the highest market share in the base year. It will remain the leading segment throughout the forecast period. The growth of this segment is due to the growing adoption of UAVs for various military operations such as surveillance, monitoring, reconnaissance, and combat operations.

The avionics segment is projected to grow significantly due to the integration of modern electronics systems, automated flight management systems, and path control.

The payload segment is expected to grow throughout the projection period. The growth of the segment is attributed to the growing incorporation of payloads such as cameras, radar, sensors, weapons, and others into the UAVs for performing various functions.

By Application Analysis

ISR Segment to Lead the Market Due to Rise Awareness to Strengthen the Defense System

The market is segmented into Intelligence, Surveillance Reconnaissance and Targeting (ISRT), logistics & transportation, combat operations, battle damage management, and others based on application.

The ISRT segment is expected to hold a leading position during the forecast period. The growth of the segment is attributed to the role of UAVs in the defense industry rather than combat operations. These flying machines are designed to crucial information and collect data on the targeted territory or terrorist area.

The air force, navy, army, and other security agencies have been using unmanned aerial vehicles for applications such as transportation and logistics for the past few years. The increase in demand for logistics and transportation is projected to fuel market growth in the coming years.

REGIONAL INSIGHTS

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The market is bifurcated into North America, Europe, Asia Pacific, and the rest of the world.

North America held the highest military drone market share in 2021. This large share is attributed to the presence of several OEMs such as Northrop Grumman Corporation, General Atomics Aeronautical Systems, Inc., and others in the U.S. The key development with the U.S. army and increased investment by prominent key players in the region have achieved advancement in drone technology. The U.S. is one of the dominant exporters of military UAVs worldwide expected to drive regional growth rapidly.

The market in Europe is anticipated to grow substantially due to the rising awareness to improve the military, navy, and air force capabilities. European countries such as the U.K., France, and Germany are competing to procure tactical and small drones to enhance ISR capability during the foreseeable future.

The market in Asia Pacific is attributed to growth at a higher CAGR, owing to the increasing defense budget of India and China.

• According to official sources, Pakistan purchased over 48 GJ-2 drones from China. GJ-2 is a MALE drone that can carry around 12 missiles or attack bombs and has a top speed of 380 km/hour.

In addition, the key players in Asia Pacific are investing heavily in drone development, which will fuel the product demand.

The rest of the world accounted for a lower share of the market as it is underpenetrated in the region. Furthermore, the key players, such as Elbit Systems Ltd and Israel Aerospace Industries Ltd., are focused on the development of technologies in surveillance, public safety, and infrastructure to boost the market growth in the region.

KEY INDUSTRY PLAYERS

Key companies such as Lockheed Martin, Northrop Grumman, and Thales Group Lead the Market

The market is consolidated due to the strong product portfolio of military drone manufacturers in developed and emerging countries. Currently, Thales Group, Lockheed Martin Corporation, and Northrop Grumman Corporation are anticipated to lead the market. However, a low entry barrier is expected to increase the number of domestic military type of drone companies entering the global market. The growing number of new entrants in the drone industry is expected to lead to a highly fragmented market in the coming years.

LIST OF KEY COMPANIES PROFILED:

• General Atomics Aeronautical Systems, Inc. (U.S.)


• Northrop Grumman Corporation (U.S.)


• Elbit Systems Ltd. (Israel)


• Israel Aerospace Industries Ltd. (Israel)


• AeroVironment, Inc. (U.S.)


• Lockheed Martin Corporation (U.S.)


• Thales Group (France)


• Boeing (U.S.)


• BAE Systems (U.K.)


• SAAB Group (Sweden)


• Textron Systems (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• December 2021 - The South Korean government approved a proposal to domestically manufacture surveillance and reconnaissance drones by 2031. These drones are procured to improve the country’s defense capabilities, particularly in the northwestern border islands.


• November 2021 - Boeing planned to convert retired U.S. Air Force Lockheed Martin F-16 jet fighters into sophisticated unmanned and manned target drones. The value of the contract was USD 49.7 million.

REPORT COVERAGE

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The research report provides detailed market analysis and focuses on key aspects such as product types, leading companies, technology, and applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

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